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      Liquid Attacker Returns 3,400 BTC After Negotiation

      An attacker who drained Blockstream's Liquid federation wallet has returned 3,400 BTC, valued at approximately $268 million, following a series of negotiations conducted through Bitcoin transactions. The attacker retained 598.5 BTC, worth about $47.2 million, which represents about 15% of the total amount withdrawn from the wallet.

      The return transaction was initiated after Blockstream communicated with the attacker using PGP-signed messages. The negotiation began on Sunday evening, with Blockstream opening a channel for communication and confirming the return of funds. The transaction was still unconfirmed as of Monday afternoon, with a fee of 1,768 satoshis attached to it.

      The incident stemmed from a bug in the Elements software that allowed the attacker to exploit a peg-out authorization key used by SideSwap, a member of the Liquid Federation. SideSwap clarified that their systems were not compromised and that the L-BTC involved was created through this software bug. As a result of the incident, bridge nodes on the Liquid network remain disabled, preventing new transactions from being processed.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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