Blockstream Tells Hackers To Return Remaining Bitcoin Stolen In Liquid Theft

Bitcoin infrastructure firm Blockstream has refused to negotiate further with hackers who last week stole 4,000 bitcoins from its Liquid network. 

Writing on X Friday, Blockstream said that the hackers still had time to return the funds before the company would work with law enforcement. 

White-hat hackers on Sunday withdrew about $320 million from the federation wallet that backs Liquid, a sidechain by Blockstream. After negotiating with Blockstream, they returned most of the funds but kept 598.5 coins worth over $46 million — demanding it as ransom. 

“Blockstream will not pay a ransom for the return of stolen funds,” the post read. “Taking assets without authorization and withholding their return is a crime, not responsible disclosure. It is not white-hat activity. It is theft.”

It added: “We will work with law enforcement, exchanges, service providers, forensic specialists, and other relevant parties to trace and recover the assets and identify those responsible.”

“We will not pay for the return of stolen property. We will not abandon our users. The Bitcoin community will not stop pursuing the funds.”

Liquid, or L-BTC, is a layer-2 created by Blockstream that allows users to fast move assets backed 1:1 with bitcoin. One of the assets, LBTC, is a token backed by bitcoin that allows for quick settlement — a bit like the Lightning Network.