Blockstream Recovers Most Funds After $47M Liquid Sidechain Hack

Liquid sidechain hack — Blockstream has recovered most of the Bitcoin stolen in a hack of its Liquid sidechain, though roughly $47 million worth of funds remains missing after negotiations with the attackers.

The incident, which occurred on September —, 2026, saw approximately 4,000 BTC drained from the federated Bitcoin sidechain. In a subsequent communication, the hackers claimed to be “white hat” actors and returned about 3,400 BTC, or 85% of the stolen funds. The remaining 600 BTC, valued at around $47 million at current prices, is still outstanding.

Blockstream confirmed the recovery and ongoing negotiations in a public statement. The company has not disclosed the terms of the agreement with the attackers but indicated that the returned funds are being secured. The claim of a “white hat” motive has been met with skepticism by some observers in the crypto security community.

The Liquid Network is a Bitcoin sidechain designed for faster, confidential transactions and the issuance of digital assets. This incident highlights the ongoing security challenges faced by federated blockchain systems and the complex dynamics of post-hack negotiations.