Liquid Network Halts LBTC Redemptions for 35 Days; Attacker Holds $496.9 Million in Bitcoin

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Release Time: 2026/10/11 16:03:58

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Summary

The Liquid Network has paused LBTC redemptions for 35 days following a network upgrade to address a security breach. An attacker exploited a vulnerability in the Elements software to transfer nearly 4,000 BTC, returning 3,400 BTC but still holding 598.5 BTC (worth $49.69 million). Blockstream has declined a 10% bounty offer and is demanding the return of the remaining BTC. An external audit of Elements v23.3.4 is currently underway. The Liquid Federation has updated its PAK list and moved redemption keys to cold storage. No date has been set for the resumption of redemptions. Some LBTC holders are using apps such as Sideswap and Sideshift.ai to migrate their funds. Low liquidity has caused delays, with one user reporting a migration period of several weeks and a 5% cost due to price spreads and fees. The BTC update indicates ongoing challenges in stabilizing the network.

Odaily Planet Daily reports that the LBTC-to-Bitcoin exchange on the Bitcoin sidechain project Liquid Network has been suspended for 35 days. As of October 11, 2026, the project still maintains an 86% support rate. The attacker previously exploited a vulnerability in the Elements software to steal nearly 4,000 bitcoins and has since returned approximately 3,400; the wallet still holds 598.5 bitcoins, valued at $49.69 million.

Blockstream rejected the attacker's demand for a 10% bounty and requested the immediate return of the remaining bitcoins. The Liquid Network stated that an independent external security audit of Elements v23.3.4 is underway, the Liquid Federation is synchronizing its PAK list, and all redemption keys have been moved to cold storage.

There is currently no specific date set for restoring redemption operations. Some LBTC holders have migrated their funds through applications such as Sideswap and Sideshift.ai, with one user reporting that the migration took several weeks due to low liquidity, with combined spreads and fees totaling approximately 5%. (Bitcoin.com News)

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