Blockstream Refuses Ransom Demand After $47 Million Bitcoin Theft on Liquid Network

Blockstream, the company behind the Bitcoin sidechain Liquid, has publicly refused to pay a ransom to attackers who stole nearly 4,000 BTC (roughly $320 million at the time) from the network's federation wallet on September 6, 2026. Blockstream halted block generation to investigate and traced the cause to a cache-key collision in its confidential transaction verification system, confirming that federation cryptographic keys were not compromised.

After Blockstream patched the vulnerable infrastructure, the attackers returned about 3,400 BTC (85% of the stolen funds) on September 7. They kept the remaining 598.5 BTC, worth around $47 million, and later demanded a 10% bounty from Blockstream's reserves, threatening that Liquid users would otherwise face a permanent 15% loss.

On September 11, Blockstream issued a firm public statement rejecting the demand, calling the incident criminal theft rather than responsible disclosure or white-hat activity, and confirming it will pursue recovery through official investigative channels instead of negotiating with the attackers.