Galaxy research lead Alex Thorn (@intangiblecoins) disclosed that the Liquid Network has identified a critical security vulnerability, which a white-hat hacker exploited to acquire approximately 4,000 BTC. The hacker communicated with Blockstream via Bitcoin on-chain OP_RETURN messages and PGP-encrypted text, and has already sent 1,000 satoshis to a federal wallet as a signal that they intend to return "most" of the funds after the vulnerability is patched. The hacker explicitly requested that Blockstream prioritize fixing the vulnerability and ensure all nodes are updated, after which the funds will be securely transferred. Technical details have been sent via PGP encryption to Blockstream and are readable only by them.
Head of Galaxy Research: Liquid White Hat Hacker to Return Most of 4,000 BTC After Vulnerability Is Fixed
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Summary
Galaxy Research Head Alex Thorn reported a vulnerability incident involving a white hat hacker who exploited a flaw on the Liquid Network to claim approximately 4,000 BTC. The hacker used OP_RETURN and PGP-encrypted messages to communicate their actions, sending 1,000 satoshis as a test. They intend to return most of the funds after the BTC update is deployed and all nodes are patched. Technical details were shared with Blockstream in encrypted form.
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