White Hat Hackers Return 3,400 BTC to Liquid Network, Keep $48M Bounty

White hat hackers have returned 3,400 BTC to the Liquid Network’s federation wallet after a day of on-chain negotiations, but kept 598.5 BTC as an implied bounty fee worth approximately $48 million.

The funds were returned in a transaction confirmed on September 7, following a public dialogue written into Bitcoin blocks. The white hats initiated contact via an OP_RETURN message, prompting encrypted replies from a Blockstream-linked address. After the white hats requested a bug fix, Blockstream confirmed its bridge nodes were patched and funds could be safely returned.

The hackers’ decision to keep 15% of the nearly 4,000 BTC initially withdrawn has been met with mixed reactions. While some celebrated the partial recovery, Blockstream appeared dissatisfied, as indicated by a subsequent series of encrypted on-chain messages and a final sad-face emoji from the white hats.

Liquid Network and Blockstream have not issued a new public statement regarding the partial fund return. The network’s official account last stated on Sunday that the sidechain was paused and the PAK itself was not compromised in the incident.