Liquid Network Recovers 85% of $320M Bitcoin Stolen

Approximately 4,000 Bitcoin, valued at around $320 million, was withdrawn from the Liquid Network's federation wallet in an incident that began on Sunday, September 6, 2026. The network, a Bitcoin sidechain operated by Blockstream, was subsequently paused as operators worked to address the security vulnerability and negotiate the return of the stolen funds. The attackers identified themselves as "whitehat hackers" and communicated with Blockstream through signed messages embedded in Bitcoin transactions. Following these on-chain discussions, the hackers returned 3,400 Bitcoin to the federation wallet on Monday, September 7, 2026. This returned amount represents about 85% of the total withdrawn. Approximately 598.5 Bitcoin, worth roughly $47 million, remains outstanding and in the possession of the group. The incident left the Liquid Network's native token, LBTC, with significantly reduced backing, as the federation wallet's balance dropped from around 4,200 Bitcoin to just 197 Bitcoin. In response to the exploit, bridge nodes were disabled, and exchanges were alerted to freeze LBTC deposits and withdrawals.