- Following the $320 million exploit on Sunday, Liquid Network was able to recover 3,400 BTC. There are still about 598 BTC outstanding, valued at almost $47 million.
- The majority of the stolen Bitcoin was returned by the perpetrators, who identified themselves as white hat hackers. In order to finish security updates and correct a chain split, Liquid has put the network on hold.
- Until Liquid certifies a secure network restart, L-BTC deposits and withdrawals are prohibited.
The Liquid Network has recovered 3,400 Bitcoin (BTC) following Sunday’s $320 million security breach, easing some of the immediate concerns surrounding the Bitcoin sidechain. However, around 598 BTC, worth nearly $47 million, remains outstanding as discussions with the unidentified hackers continue.
The attackers drained approximately 4,000 BTC from Liquid’s federation wallet, which holds the Bitcoin backing the network’s L-BTC tokens. The group later described itself as white hat hackers and agreed to return most of the funds after Liquid addressed the reported vulnerability.
We are aware of a security incident on @Liquid_BTC. Purported white-hat hackers have withdrawn ~4,000 BTC (~$320 million) from the Liquid Federation wallet. The @Blockstream team is working on contacting them on-chain with a signed message.
What we know so far is that the funds…
— Liquid Network 🌊 (@Liquid_BTC) September 6, 2026
Hack Drained Most Of Liquid’s Bitcoin Reserves
Liquid Network is a Bitcoin sidechain developed and maintained by Blockstream and a federation of major crypto companies, including exchanges and miners. The network allows users to move Bitcoin into L-BTC, which is designed to provide faster and more private transactions.
Each L-BTC is meant to be backed by one BTC stored in Liquid’s federation wallet. Before the breach, that wallet contained about 4,200 BTC. The attackers took 4,000 BTC, leaving just about 197 BTC in the reserve. This drop raised concerns that L-BTC might no longer be fully backed.
Following the incident, Liquid operators paused the network and disabled bridge nodes. Crypto exchanges were also asked to temporarily freeze L-BTC deposits and withdrawals. Other assets issued on Liquid, including Tether, were not affected by the attack.
3,400 BTC Returned After Public Negotiations
Update: 3,400 BTC of the roughly 4,000 BTC withdrawn on September 6 has been returned to the @Liquid_BTC Federation wallet. The return followed confirmation from @Blockstream that the affected bridge nodes have been patched. Approximately 598 BTC remains outstanding, and…
— Samson Mow (@Excellion) September 7, 2026
The hackers communicated with Liquid through messages included in Bitcoin transactions. The organization returned 3,400 BTC to the federation wallet after Liquid verified that the impacted bridge nodes had been patched. Former Blockstream executive and known Bitcoin enthusiast Samson Mow claimed that roughly 598 BTC remained unaccounted.
While security enhancements were being finished, he continued, Blockstream continued to communicate with the group. The return represents a major step toward restoring Liquid’s Bitcoin reserves, but the incident is far from resolved.
Liquid Network Faces More Security Work
Liquid must still complete additional security measures, address a chain split that occurred during the network pause, and verify that L-BTC is properly backed before restarting operations.
Mow also warned users not to send Bitcoin to Liquid peg-in addresses until an official restart announcement is made.
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