{"id":637,"date":"2026-11-04T16:00:52","date_gmt":"2026-11-04T16:00:52","guid":{"rendered":"https:\/\/1stblock.info\/?p=637"},"modified":"2026-11-04T16:00:52","modified_gmt":"2026-11-04T16:00:52","slug":"liquid-network-restores-full-bitcoin-backing-after-320m-exploit","status":"publish","type":"post","link":"https:\/\/1stblock.info\/?p=637","title":{"rendered":"Liquid Network Restores Full Bitcoin Backing After $320M Exploit"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The Liquid Federation said Tuesday that the Bitcoin sidechain\u2019s reserves once again fully back all <strong>L-BTC<\/strong> 1:1, nearly two months after an exploit drained about <strong>$320 million<\/strong> in bitcoin from the network. Reserve balances are published on liquid.network, where node operators can verify the backing themselves.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The final top-up came from the network\u2019s developer. Another 300 BTC landed on Monday and 250 BTC later that day, restoring full backing. Blockstream was identified as the source of the funds. That <strong>550 BTC<\/strong> closed the hole left by the attackers. They returned 3,400 BTC shortly after the incident but kept roughly 598.5 BTC, worth about $47 million at the time. Blockstream had refused to pay a ransom for those coins.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The incident began on Sept. 6, when unknown actors withdrew roughly <strong>4,000 BTC<\/strong> from the federation wallet, draining nearly 95% of reserves, and Liquid halted all new transactions. Liquid\u2019s September incident report traced the exploit to a bug involving cached range proof verifications in Elements, the software that runs the network. The flaw let the attackers mint unbacked tokens and withdraw the bitcoin.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Liquid is a Blockstream-built network that lets users move bitcoin-backed assets quickly, including swaps between stablecoins and bitcoin. Restored backing is the precondition for normal operation. Liquid has said the final phase of recovery means reestablishing full 1:1 backing, then reactivating federation peg-outs in a controlled way for authorized key holders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Full backing removes the immediate solvency question for L-BTC holders. Liquid\u2019s federated custody model, however, faces a harder test: winning back users and liquidity after one of the largest exploits in Bitcoin\u2019s second-layer history.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Liquid Federation said Tuesday that the Bitcoin sidechain\u2019s reserves once again fully back all L-BTC 1:1, nearly<\/p>\n","protected":false},"author":2,"featured_media":638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-last-news"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=637"}],"version-history":[{"count":1,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/637\/revisions"}],"predecessor-version":[{"id":639,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/637\/revisions\/639"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/media\/638"}],"wp:attachment":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}