Self-Described White Hats Demand 10% Bounty From Blockstream Over Liquid Network Exploit

Blockstream’s dispute with a group claiming responsibility for a Liquid Network exploit escalated Wednesday after the self-described white hats demanded a 10% bug bounty and threatened additional losses for holders.

Message Published on Bitcoin Blockchain

The group communicated its latest position through an OP_RETURN transaction on the Bitcoin blockchain. The feature allows users to embed a small amount of data in a Bitcoin transaction, making the message publicly visible and difficult to alter after confirmation.

The message reportedly directed its demand at Blockstream, the company that operates and supports the Liquid Network. The group described itself as acting in a white-hat capacity, although the claim and the circumstances surrounding the alleged exploit have not been independently verified.

Dispute Centers on Alleged Liquid Exploit

Liquid is a Bitcoin sidechain designed to support faster settlement and the issuance of digital assets. Blockstream provides infrastructure and development support for the network.

The latest communication marks a sharper escalation in the standoff. In addition to requesting a bounty equivalent to 10% of the affected funds, the group warned that holders could face further losses if its demands were not addressed.

Details Remain Unclear

Public information about the alleged exploit, the amount involved and the group’s access to affected assets remains limited. It is also unclear whether Blockstream has accepted the group’s characterization of the incident or agreed to the proposed bounty.

The dispute underscores the risks associated with security incidents involving blockchain infrastructure, where attackers or self-described security researchers can use on-chain messages to publicize demands and communicate directly with the wider community.