Bitcoin infrastructure company Blockstream has refused topay a ransom to the hackers holding nearly 600 Bitcoin taken from the Liquid Network. The company has warned that it will pursue recovery through law enforcement and blockchain investigations if the funds are not returned.
“Blockstream will not pay a ransom for the return of stole funds. Taking assets without authorization and withholding their return is a crime, not responsible disclosure. It is not white-hat activity. It is theft,”the company postedon X.
Blockstream said Friday that it had engaged with hackers in good faith to recover users’ assets but would not accept their demand. It also rejected their claim that the incident was a white-hat operation.
In an on-chain message shared Wednesday by Jan3 CEO and former Blockstream chief strategy officer Samson Mow, the hackers demanded that Blockstream pay a 10% bounty from its own funds. They also warned that Liquid holders would otherwise face a 15% loss.
The incident began on September 6, when attackers withdrew about 4,000 BTC from Liquid’s federation wallet. Liquid, a Bitcoin sidechain, paused operations following the withdrawal.
Later, the hackers returned 3,400 BTC after Blockstream confirmed that it had patched the affected bridge nodes. That recovered roughly 85% of the withdrawn Bitcoin, while about 598 BTC remained outstanding.
Liquid resumed block production on Thursday after emergency software updates, but it produced only empty blocks. Transactions and Bitcoin transfers into and out of the network remained suspended, meaning the restart had not restored normal user activity.
Blockstream has urged the hackers to voluntarily return the remaining Bitcoin. Otherwise, it said it would work with law enforcement, exchanges, service providers, and forensic specialists to trace and recover the assets and identify those responsible.
Sign up on WEEX and roll for a chance to win a share of the $1,000,000 prize pool.
