Liquid Network Says LBTC Is Fully Backed Again After September Hack
The federation said reserves again match circulating LBTC after a flaw let an attacker mint about 4,000 tokens without backing Bitcoin.
- The Liquid Federation announced on Tuesday that network reserves have been fully restored, reestablishing 1:1 Bitcoin backing for all LBTC tokens following a final 250 BTC deposit on November 2.
- A software attack involving Elements prompted the recovery, as the exploit allowed an attacker to create roughly 4,000 LBTC, causing reserves to fall from approximately 4,205 BTC to 197 BTC.
- While the attacker returned 3,400 BTC, a shortfall remained; Samson Mow identified Blockstream as the funding source, writing, "As stated many times, Blockstream," in response to a question.
- SideSwap confirmed that reserves now match the circulating LBTC supply as of November 3, although swaps reopened and direct peg-outs remain restricted while the network modernizes.
- The Liquid Federation promised further information regarding governance changes as developers continue updating authorization procedures involving offline Bitcoin keys to prevent similar failures in coming weeks.
21 Articles
21 Articles
Liquid restores 1:1 BTC backing as Adam Back warns on AI fixes
Following a September exploit that drained about $320 million in BTC and left a gap in its reserve, the Liquid Federation has now announced that it has restored full 1:1 Bitcoin for LBTC. The missing coins were reportedly supplied by Blockstream. LBTC is the token that represents Bitcoin on Blockstream’s sidechain. Blockstream filled the reserve...
Liquid Network Restores 1:1 Bitcoin Backing After $320M Exploit
TL;DR Liquid Network restored 1:1 Bitcoin backing for all LBTC two months after an exploit drained about 4,000 BTC, worth roughly $320 million, from the Federation wallet. Around 3,400 BTC were returned, while Blockstream supplied Bitcoin that closed the reserve gap after rejecting a demand tied to the unrecovered coins. Liquid hardened peg-out keys, disabled ...
Bitcoin's side network Liquid announced that it has replenished its reserves following the September attack, restoring a one-to-one Bitcoin exchange for all LBTC. However, closing the reserve gap does not mean that direct withdrawals have been fully reopened.
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