White hat hackers targeted Blocksteam's Liquid sidechain, taking over 4,000 bitcoins. They want to keep some of the bitcoins as a reward. Blockstream isn't happy.
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.
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. ” To those responsible for the theft of bitcoin from the Liquid Network:Blockstream will not pay a ransom for the return of stolen funds. Taking assets without authorization and withholding their return is a crime, not responsible disclosure.
It is not white-hat activity. ” “We will not pay for the return of stolen property. We will not abandon our users.
” 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. Hackers were able to get the funds by exploiting an inflation bug on the Liquid sidechain to create over 4,000 LBTC that did not exist before and cash them out for real, on-chain bitcoins.
The hackers then had an exchange with Blockstream via messages written into Bitcoin blocks. In one message, the white hats wrote: “Please fix the bug first. The chain is under risk at latest commit right now.
Make sure every node is patched. ” In the latest message, the hackers slammed Blocksteam as “delusional, greedy, and arrogant,” and threatened to reveal all of Blockstream’s encrypted messages in the exchange unless the company allowed thieves to keep 10% of the bitcoins. “You SHALL pay 10% using your own money as bug bounty or you will cause all your holders a 15% loss for your irresponsibility and stinginess,” the message read.
The Bitcoin community is still reeling after hackers in July were able to steal over 1,800 bitcoins worth close to $140 million from Coldcard wallet holders. Users of the popular hardware wallet, created by Coinkite, were targeted because the product’s manufacturer did not use a true random number generator, allowing hackers to essentially guess investor seedphrases.
