Liquid ‘White Hats’ warn 15% user loss unless Blockstream pays 10% bounty—3,400 BTC already returned
Conflict over the Liquid sidechain escalated after the party claiming to be white-hat hackers demanded a 10% bug bounty from Blockstream’s own funds and warned that “failure to do so could result in a 15% loss for Liquid users,” according to the latest update shared by Samson Mow.
Hackers’ claims and demands
In a message cited by Mow, the attackers accused Blockstream of “flagrant neglect of security,” alleging the company allocated only $1.5 million—or possibly nothing—to protect $5 billion in assets. The message labeled Blockstream “delusional, greedy, and arrogant” over its security handling and said the group planned to publish “the private key needed to decrypt their conversations” afterward. These claims have not been independently verified.
Liquid paused; peg-ins discouraged
Liquid has kept the sidechain paused as Blockstream and Federation members work on additional security fixes, address a chain split, and prepare for a coordinated restart, per the report. Users were told not to send Bitcoin to Liquid peg‑in addresses until the network is back online.
What was taken and what was returned
The latest message followed the removal of roughly 4,000 BTC from Liquid’s Federation wallet on September 6—valued around $320 million at the time. The party behind the withdrawal initially claimed to be white-hat hackers and said funds would be returned once Blockstream fixed the security issue and patched affected nodes. After Blockstream confirmed the bridge nodes were patched, 3,400 BTC was returned to the Federation wallet, while about 598 BTC remained with the attackers, according to the report.
Mow’s warning
In separate tweets, Mow questioned whether publicly admitting to taking BTC and then demanding a bounty was a “wise move,” adding that communicating via PGP was already a “courtesy.” He suggested the group had left “more clues than it might realize” and cautioned that attempting to return funds does not necessarily mean they can “walk away from the incident.”
Mow concluded: “As a white hat, the road only widens; as a black hat, you’re forever on edge. Dreaming of walking away with assets unscathed is nothing but delusion. Some doors, once opened, can never be closed again.”