Liquid Federation has returned 3,400 bitcoins worth about $270 million to the wallet after alleged white-hat hackers withdrew about $320 million from the Bitcoin sidechain’s reserves.
On Monday, JAN3 CEO and former Blockstream executive Samson Md said The rollback follows confirmation from Blockstream that the affected bridge nodes have been patched. He said about 598 BTC remained outstanding and Blockstream continued to engage with actors.
The return follows a security incident on Sunday in which hackers withdrew roughly 4,000 BTC from the wallet’s roughly 4,200 BTC. Onchain records display That’s exactly 3,400 BTC transferred back to the federation’s wallet address.
Blockstream said updated software has been deployed and federation members are preparing for a coordinated restart. Liquid issued L-BTC against the bitcoins held by its federation, so around 85% of the withdrawn bitcoins returned, restoring much of the support removed in the incident as the paused network prepared to resume operations.
Bitcoin returns follow onchain discussions
The original withdrawal was processed through SideSwap’s pegged-out authorization key, although Liquid and SideSwap said the key itself was not compromised. SideSwap said L-BTC arose from a bug in the components involved, the open-source software that underpins Liquid.
Blockstream communicated with actors through signed messages embedded in Bitcoin transactions. The actors, who identified themselves as White Hat, said they would return most of the funds once the vulnerability was fixed and each node installed the patch.
Related: Satoshi-era Bitcoin awakens after 16-year hibernation as 600 BTC moves
Mow said Liquid paused while Blockstream and Federation members made further fixes and security improvements, resolved a chain split and prepared for a secure restart. He asked users not to send bitcoins to Liquid peg-in addresses until the restart of the network was confirmed, otherwise no user action was required.
Laser’s Chief Technology Officer is Charles Guillemette to question Details of actors’ white hats after partial return. He said that if the roughly 600 BTC still represented a reward negotiated through encrypted onchain communication under their control, the arrangement looked “more like extortion than white-hat hacking.”
Neither Blockstream nor Liquid has publicly described the outstanding Bitcoin as a bounty or disclosed any repayment terms. Cointelegraph reached out to both companies for comment but did not receive a response before publication.
magazine: ‘White Hat’ Takes 4000 BTC From Liquidity, ETFs See Best Inflows Of 2026: Hodler’s Digest
