Blockstream's Liquid hacker demands a bounty for the final 600 BTC

Blockstream’s sidechain Liquid resumed block production on Thursday, about four days after a person claiming to be a white hat hacker drained close to 4,000 BTC from its federation wallet and then handed back most of it. The restart is pertinent to anyone with Liquid Bitcoin (L-BTC) or stablecoins on the network.

Funds have been suspended since Sunday, and about 600 BTC still in the attacker’s hands represents a hole in the reserve backing those tokens.

SideSwap’s peg-out key was used but never stolen

In a status update posted at 10:00 UTC, the @Liquid_BTC account said that block production had resumed “without transactions” as a precautionary measure while the team monitors for full stabilization.

Bridge and functionary nodes of Liquid now have the requisite software patches live. Functionary nodes are signing and validating blocks as they ought.

Peg operations are switched off while the network rebuilds its BTC-to-L-BTC reserve.

It all commenced on Sunday, September 6, when hackers claiming white-hat status withdrew about 4,000 BTC, worth about $320 million, from the Liquid Federation wallet. That was about 95% of the wallet’s ~4,200 coin balance.

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