Blockstream Refuses Ransom After Liquid Network Hack, Works With Law Enforcement to Recover Remaining Funds

Blockstream has confirmed it will not pay a ransom to hackers who breached the Liquid network's federated wallet, calling the unauthorized withdrawal theft rather than a legitimate transaction. The attackers, who described themselves as "white hats," initially withdrew about 4,000 bitcoin (worth close to 320 million dollars) but later returned 3,400 BTC after claiming they had identified and fixed vulnerabilities in the affected bridge nodes. Around 598 BTC remain outstanding.

The hackers reportedly demanded a 10% premium from the funds, warning that refusal would cause a 15% loss for Liquid holders. Blockstream has rejected this demand and says it is instead coordinating with law enforcement, exchanges, and digital forensic specialists to trace the movement of the remaining funds and identify those responsible.

Liquid suspended operations on September 6 following the incident and resumed block production on Thursday after emergency software updates, though it is currently only producing empty blocks. Bitcoin transfers to and from the network remain suspended, meaning the platform has not yet returned to full operation. Recovery of the outstanding funds and the network's return to normal service will depend on the ongoing investigation.