Blockstream Refuses Ransom Demand as Hackers Hold Nearly 600 BTC From Liquid Breach

Bitcoin infrastructure firm Blockstream has rejected a ransom demand from hackers who still hold nearly 600 BTC taken from its Liquid Network sidechain. The company said paying the demanded 10% bounty would reward theft rather than resolve it, stating plainly that withholding stolen assets is a crime, not a responsible security disclosure.

The incident began on 6 September when self-described white-hat hackers withdrew about 4,000 Bitcoin, worth roughly $320 million at the time, from Liquid's federation wallet, forcing the network to pause operations. After Blockstream patched the affected bridge nodes, the hackers returned 3,400 BTC but kept about 598 BTC, reportedly threatening a 15% loss for Liquid holders unless Blockstream paid a bounty.

Liquid resumed producing blocks on Thursday following emergency software updates, though these are currently empty and transfers into or out of the network remain suspended. Blockstream said that if the hackers do not voluntarily return the remaining funds, it will work with law enforcement, exchanges, and forensic specialists to trace the assets and identify those responsible.