Liquid Network Keeps Bitcoin Redemptions Frozen 35 Days After Attack

Liquid Network has kept redemptions from its LBTC token into Bitcoin (BTC) frozen for 35 days, while 598.5 BTC worth about $49.69 million remains in the attacker’s wallet.

The attacker previously moved nearly 4,000 BTC and has returned about 3,400 BTC. Blockstream rejected a demand for a 10% bounty and is seeking the return of the remaining Bitcoin.

Liquid’s support level stood at 86% on Oct. 11. The network has not provided a date for resuming redemptions.

An independent external security audit of Elements v23.3.4, the software connected to the incident, is underway. The Liquid Federation is also updating its PAK list and has moved all redemption keys into cold storage.

Some LBTC holders have moved funds through Sideswap and Sideshift.ai. One user reported that limited liquidity stretched the process over several weeks, with combined spreads and fees of about 5%.