Blockstream Denies Bounty To Hackers Behind Liquid Sidechain Drain

Blockstream has taken a hard stance against attackers who recently exploited its Liquid sidechain. After a software flaw allowed hackers to drain 4,000 BTC, they returned 3,400 BTC and demanded a payment for the remainder. Blockstream rejected this request, arguing that keeping nearly 600 BTC is theft rather than a legitimate bug bounty.

This refusal challenges a trend where crypto projects routinely pay hackers a percentage of stolen funds to secure the return of the rest. While past projects like Nomad adopted this practice, Blockstream maintains that unauthorized asset seizure is criminal activity. The company stated that open source teams should not be expected to fund massive payouts for stolen property.

Industry leaders are starting to mirror this frustration. Some security experts argue that empty bridge protocols are not performing research but are instead engaging in extortion. With nearly 600 BTC still missing, Blockstream is now relying on law enforcement and chain forensics to track the attackers.

The outcome of this situation may change how developers respond to future exploits. If companies continue to reject these demands, it could deter attackers who assume they are guaranteed a payday for returning stolen funds.