Blockstream announced on September 7 that its Liquid Network bridge nodes have been patched and secured, clearing the way for the return of approximately 4,000 BTC, worth around $320 million, that were fraudulently drained from the Liquid Federation wallet a day earlier. The exploit stemmed from a bug in the Elements software, which caused the Liquid Federation wallet’s reserves to drop from over 4,200 BTC to approximately 197 BTC, leaving L-BTC with less than 5% collateral backing. Blockstream coordinated the fund return through PGP-signed messages on the Bitcoin blockchain, with the attacker expressing the intention to return the remaining 3,998.5 BTC.
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