Liquid Network halts new transactions after 'nice guy' hackers steal nearly all its Bitcoin — but then return most of it after a patch is issued
Liquid Network is still disrupted, but users can breathe a sigh of relief as most of the stolen funds have been returned.
The Liquid Network hack revealed a bug in SideSwap, resulting in nearly all its Bitcoin (3,998 BTC) being stolen by an anonymous group of hackers. These hackers claimed they acted in good faith, promising to return the stolen funds once the vulnerability was fixed. The Liquid Network, created by Blockstream and operated by the Liquid Federation, is a sidechain designed to speed up Bitcoin transactions and facilitate the creation of other digital assets.
When the hackers exploited the SideSwap service, the Liquid Federation halted new transactions and issued a warning about possible disruptions until the situation was resolved. In an unexpected turn of events, the hackers began communicating with network maintainers via on-chain Bitcoin transactions, assuring them that they would return the funds after the vulnerability was fully addressed.
Blockstream confirmed that the affected bridge nodes had been patched, and the hackers had indeed returned 3,400 BTC, but 598 BTC remained unaccounted for. The Liquid Network remains paused as Blockstream and Federation members work on additional fixes and security improvements, aiming to restore the network safely.
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Also reported by 1 other outlet
- Hackers Return $263 Million Stolen From Liquid Network securityweek.com
