‘White hat’ hackers take $47 million bounty after $320 million crypto theft

A public, hours-long negotiation between hackers and a cryptocurrency firm on Sunday ended with the attackers keeping $47 million of a $320 million theft as a “reward” for identifying what they said was a bug in the company’s platform.

The trading platform Liquid Network said on Sunday that “purported white-hat hackers” withdrew 4,000 BTC ($320 million) from its own wallet. Blockstream, which runs Liquid, pledged to reach out to the hackers and said deposits and withdrawals were paused. Liquid supports a coin pegged to the price of bitcoin.

Over the next 12 hours, the company negotiated in public on the blockchain with the hackers, who initially wrote, "we are whitehats, contact us on chain" in a message attached to the transaction bridging the $320 million out of Liquid’s account. 

“Sending most back…is that ok," the hackers said, before demanding Blockstream fix an alleged vulnerability.

"Please fix the bug first. The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix," they added. 

After several public and private messages back and forth, the hacker sent $266.5 million worth of bitcoin back to Liquid on Monday morning and kept 598.5 BTC — worth about $47 million  — as reward. The two sides have continued to go back and forth in public but encrypted messages on the blockchain.