Liquid Federation Restores Full Bitcoin Backing for LBTC

The Liquid Federation said November 2 that its bitcoin reserves had been fully restored, returning the Liquid Network’s LBTC token to 1:1 backing after a September exploit left a large shortfall. The federation’s announcement confirmed the reserve status but did not identify all contributors to the recovery. Blockchain records show deposits into the reserve wallet, including 300 BTC and 250 BTC on November 2. Samson Mow, a federation board member and former Blockstream executive, attributed the replacement funds to Blockstream on X. The federation has not published a detailed funding breakdown. The September 6 exploit involved a vulnerability in Elements, the open-source software used by Liquid. Blockstream’s incident assessment said the flaw involved cached range-proof verification and allowed an attacker to create roughly 4,000 LBTC without corresponding bitcoin. The attacker used the tokens to withdraw bitcoin from the federation wallet. About 3,400 BTC was returned the next day, while roughly 600 BTC remained outstanding. Liquid’s recovery has involved distinct services. BTC-LBTC swaps through participating providers had resumed several weeks before the full reserve...