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Liquid Network receives most stolen bitcoin after breach

About 598 BTC, worth roughly $47 million, is still outstanding as Liquid remains paused while fixes are completed and a chain split is resolved.

Reported · Written up by our desk · Market Structure

CoinDesk reports that the white hat group behind Sunday’s Liquid Network breach has returned 3,400 BTC to the federation wallet that backs the L-BTC token, leaving about 598 BTC, worth roughly $47 million, still outstanding.

The stolen amount came after attackers withdrew 4,000 BTC, worth about $320 million, from the federation wallet that is supposed to back L-BTC one-for-one with real bitcoin locked in a shared wallet.

Liquid Network, a Bitcoin sidechain built by Blockstream, was hit in a way that left the system far from fully backed, with operators reporting the federation wallet was left with just 197 BTC and L-BTC deposits and withdrawals were frozen.

CoinDesk adds that Blockstream and federation members are working to strengthen security, patch bridge nodes, resolve a chain split, and ensure L-BTC is fully backed before restarting the network, while other Liquid-issued assets, including tether, were not affected.

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