Blockstream refuses ransom demand after recovering 85% of stolen BTC

Blockstream refuses ransom demand after recovering 85% of stolen BTC

The company said assets taken without authorization constitute theft and should not be rewarded.

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By Editorial Team
Edited by Vivian Nguyen

Blockstream has refused to pay a ransom for Bitcoin stolen from the Liquid Network after recovering 85% of the BTC taken.

In a statement issued on Sept. 11, the company called the unauthorized removal and continued withholding of the remaining funds a crime rather than white-hat activity.

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Blockstream said it would not establish a precedent in which developers of open-source Bitcoin software are forced to pay a ransom and warned that the remaining Bitcoin could still be traced and recovered through lawful means.

The company called on those holding the Bitcoin to return the funds and said there remains a path to resolving the incident responsibly.

The self-claimed white-hat hacker returned 3,400 BTC worth about $268 million to the Liquid Federation wallet earlier this week after Blockstream patched the underlying vulnerability. About 600 BTC, or 15% of the total withdrawn, remain with the party.

The exploit, disclosed on Sept. 6, originated in Elements, the Bitcoin Core fork used by Liquid, where a range-proof verification cache bug apparently allowed unbacked L-BTC to be created. The tokens were then used to obtain real Bitcoin from Liquid’s reserves through the normal peg-out process.

Liquid paused operations after deploying an emergency Elements patch, and resumed block production on Sept. 10, though peg-outs and many transactions remained suspended as recovery efforts continued.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
FINANCE
Blockstream refuses ransom demand after recovering 85% of stolen BTC
Blockstream refuses ransom demand after recovering 85% of stolen BTC

The company said assets taken without authorization constitute theft and should not be rewarded.

By Editorial Team
Edited by Vivian Nguyen

Share

Add us on Google

Blockstream has refused to pay a ransom for Bitcoin stolen from the Liquid Network after recovering 85% of the BTC taken.

In a statement issued on Sept. 11, the company called the unauthorized removal and continued withholding of the remaining funds a crime rather than white-hat activity.

Advertisement

Blockstream said it would not establish a precedent in which developers of open-source Bitcoin software are forced to pay a ransom and warned that the remaining Bitcoin could still be traced and recovered through lawful means.

The company called on those holding the Bitcoin to return the funds and said there remains a path to resolving the incident responsibly.

The self-claimed white-hat hacker returned 3,400 BTC worth about $268 million to the Liquid Federation wallet earlier this week after Blockstream patched the underlying vulnerability. About 600 BTC, or 15% of the total withdrawn, remain with the party.

The exploit, disclosed on Sept. 6, originated in Elements, the Bitcoin Core fork used by Liquid, where a range-proof verification cache bug apparently allowed unbacked L-BTC to be created. The tokens were then used to obtain real Bitcoin from Liquid’s reserves through the normal peg-out process.

Liquid paused operations after deploying an emergency Elements patch, and resumed block production on Sept. 10, though peg-outs and many transactions remained suspended as recovery efforts continued.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.