Blockstream rebuffs ransom demand after Liquid bitcoin breach
Blockstream has refused to pay a ransom for nearly 600 bitcoin still controlled by the actors behind the $320 million exploit of its Liquid Network, saying it will pursue recovery through law enforcement, exchanges and forensic specialists if the funds are not returned. The Bitcoin infrastructure company said on September 11 that it had engaged with those responsible in an effort to recover user…
Blockstream, the Bitcoin infrastructure company, has rejected a ransom demand from the individuals responsible for a breach of its Liquid Network, which saw nearly 600 bitcoins remain under their control. Blockstream stated it would pursue recovery through law enforcement, exchanges, and forensic specialists if the funds were not returned.
The attackers, claiming to be white-hat hackers, had initially sought a 10% bounty after returning most of the stolen bitcoins. Blockstream described the actors' actions as theft rather than responsible disclosure and would not set a precedent where open-source developers could be forced to pay a ransom. Approximately 598.5 bitcoins, worth around $47 million, remained outstanding when Blockstream issued its statement.
The vulnerability that enabled the exploit was identified in Elements, the open-source software underlying Liquid, and allowed invalid confidential transactions to be created and redeemed for real bitcoins. Blockstream released Elements version 23.3.4 on September 9 and Liquid resumed block production on September 10, with transactions restored later that day.
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