- The white-hat group responsible for hacking 4,000 Bitcoin worth roughly $320 million on the Liquid Network promised to return the funds they stole once Blockstream patches the vulnerability that enabled the exploit.
- BTC continues to ride on strong momentum amid nearly a billion dollars in ETF net inflows over the past week and a favorable regulatory climate in the US.
A group comprised of white-hat hackers has recently exploited a vulnerability on the Liquid Network, a Layer-2 (L2) Bitcoin (BTC) side chain, to steal 4,000 BTC worth nearly $320 million at prevailing rates.
In a supposed display of good faith to prove they are indeed who they claim to be, the culprits have initiated a conversation with Blockstream, the primary technology provider and founding member of the Liquid Network. The team committed to return the stolen Bitcoin under specific terms.
Negotiations Between Blockstream and Hackers Underway
Using Bitcoin’s OP_RETURN function, a special instruction in the network’s script that allows users to store a small amount of custom data within a transaction, the hacking outfit asked Blockstream to, at least, commit to fixing the bug that allowed them to drain the funds first. They vowed to give back the compromised assets once the company proves it has patched every node.
After confirming the attack on its Liquid Federation wallet, Blockstream said it had already notified crypto exchanges about the incident. It led to them freezing LBTC deposits and withdrawals to contain the problem.
Meanwhile, the company assured the crypto community that other tokens on Liquid, including Tether’s USDT, the Brazilian real-pegged DePix, and tokenized real-world assets (RWAs), are all unaffected by the exploit. Additionally, it temporarily disabled bridge nodes on the protocol and has entirely paused the liquid sidechain to prevent new transactions.
Blockstream apologized to affected Liquid wallet users, assuring them it is already working on a solution to restore normal network activity. It has also confirmed that its team is contacting the hackers using signed messages on-chain, making their conversation transparent and publicly verifiable.
Bitcoin Performance
Despite another alarming hacking incident in the crypto community, Bitcoin maintained traction between $79,000 and $80,000. This shows resilience in the premier crypto asset, reinforced by roughly $986.7 million in total net inflows into spot Bitcoin exchange-traded funds (ETFs) last week.
Furthermore, cooperation between the US Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) toward clearer rules for digital assets has offered some reassurance about the sector’s future amid another looming delay of the pending Digital Asset Market CLARITY Act in the Senate.
