Liquid Network Peg-Outs Remain Suspended 11 Days After Nearly 4,000 BTC Incident

Withdrawals from the Liquid Network to the Bitcoin blockchain remain unavailable 11 days after so-called white hat hackers removed nearly 4,000 BTC from the network. Although approximately 3,400 BTC has been returned, the hackers still control 598.50 BTC, valued at more than $45 million based on current market prices.

Bitcoin Withdrawals Remain Halted

Liquid Network users are still unable to complete BTC peg-outs, the process used to convert Liquid’s bitcoin-pegged asset, L-BTC, into native bitcoin on the Bitcoin network.

The suspension follows an incident in which nearly 4,000 BTC was siphoned from the network. The disruption has left users unable to redeem L-BTC through the standard peg-out process while the incident remains unresolved.

Most Funds Returned, but 598.50 BTC Remains Outstanding

Approximately 3,400 BTC has reportedly been returned since the incident. However, blockchain activity indicates that 598.50 BTC remains in the hackers’ possession. At a bitcoin price above $75,000, those funds are worth more than $45 million.

The remaining balance continues to be a central point in the dispute between the attackers and the parties responsible for operating and securing the Liquid Network.

Onchain Dispute Continues

The parties have exchanged messages and demands through onchain transactions, but the dispute has not yet resulted in the restoration of peg-outs. Blockstream, a key developer and infrastructure provider for the Liquid Network, has reportedly refused the hackers’ demand.

Until the outstanding funds are addressed and network operators complete their security review, Liquid users may continue to face restrictions on moving L-BTC back to the Bitcoin blockchain.