Blockstream Refuses Ransom Demand for Stolen Liquid Network Bitcoin

Blockstream confirmed it will not pay a ransom to recover nearly 600 BTC still held by the parties responsible for a recent hack on the Liquid Network. The firm rejected the idea that the attackers acted as white hat security researchers. Instead, Blockstream stated that withholding the stolen funds is a criminal act rather than an example of responsible disclosure.

The company noted that paying a 10 percent fee on the stolen assets would set a dangerous precedent for open source projects. Blockstream plans to coordinate with law enforcement, crypto exchanges, and forensic experts to track the stolen funds and identify those behind the exploit.

The hack initially saw 4,000 BTC drained from a federation wallet on September 6. While 3,400 BTC were returned after Blockstream patched its bridge nodes, the remaining shortfall creates a significant gap in the L BTC peg. Neither Blockstream nor the Liquid Federation has disclosed how they plan to cover the missing value if the funds are not recovered.

For now, the Liquid Network has resumed block production, but peg out operations remain paused while the network stabilizes. Users should remain cautious of phishing attempts, as both Blockstream and Liquid reported a rise in fake recovery sites and impersonation scams following the attack.