Liquid attackers offer to return most of 4,000 BTC

On Sept. 7, unidentified actors controlling nearly 4,000 BTC taken from Liquid Network offered to return “most” of the funds after Blockstream fixes the vulnerability behind the estimated $320 million incident. Summary Nearly 4,000 BTC left Liquid’s federation wallet, representing approximately 95% of its reported Bitcoin reserves. The unidentified actors offered to return most funds after Blockstream patches the undisclosed network vulnerability. Bitcoin OP_RETURN messages and PGP signatures created a publicly verifiable communication channel between both parties. Liquid disabled bridge nodes and asked exchanges to suspend L-BTC deposits and withdrawals during investigation. No confirmed repayment, public patch or network reopening had occurred when this article was prepared. The actors communicated their offer through Bitcoin transactions carrying OP_RETURN messages, according to a reconstruction published by Galaxy Research head Alex Thorn. They asked whether returning “most” of the Bitcoin to the federation’s address would be acceptable. A later message told Blockstream to “fix the bug first” and ensure every node received the patch. The actors claimed the chain remained expose...