Blockstream Rejects 10% Bounty Demand After Nearly 4,000 BTC Drained From Liquid Network

Blockstream has rejected a demand for a 10% bounty from a group that drained nearly 4,000 BTC from the Liquid Network. The group returned approximately 3,400 BTC but retained about 598.5 BTC and warned that holders of Liquid Bitcoin could face a 15% loss.

Blockstream Calls Incident Theft

In a direct response, Blockstream said it would not pay the requested bounty. The company characterized the unauthorized removal of the bitcoin as theft rather than a white-hat security disclosure.

White-hat hackers typically identify vulnerabilities and report them to the affected organization, often allowing the issue to be resolved before details are disclosed. Blockstream’s response indicates that it does not view the group’s actions as falling within that framework.

Funds Returned, Bitcoin Retained

The group reportedly returned roughly 3,400 BTC while keeping approximately 598.5 BTC. It also warned that Liquid Bitcoin, known as L-BTC, could suffer a 15% loss as a result of the incident.

L-BTC is a bitcoin representation used on Liquid, a Bitcoin sidechain designed to support faster and more confidential transactions. Any disruption affecting the assets backing or circulating on the network could have implications for users and market participants.

Bounty Dispute Remains Unresolved

Blockstream’s refusal to pay leaves the dispute centered on whether the incident should be treated as a security disclosure or an unauthorized asset theft. The company has drawn a clear distinction between responsible vulnerability reporting and the removal of funds without authorization.