Liquid Network, a Bitcoin sidechain operated by Blockstream, has suspended L-BTC redemptions after a bug in the Elements software enabled the unauthorized creation and redemption of L-BTC, draining approximately 3,996 to 4,000 BTC from its federation reserve, worth around $320 million. The reserve fell from roughly 4,205 BTC to just 197 BTC before white-hat actors recovered about 3,400 BTC, leaving a shortfall of 598 to 603 BTC. As of October 11, 2026, the reserve covers approximately 86% of the outstanding L-BTC supply. Redemptions will only resume once full 1:1 backing is restored, security audits are completed, and new key management procedures are in place. Other assets issued on Liquid, including USDT, were not impacted.
Source: Read the original article
