Galaxy Research Chief: Liquid White Hat Says It Will Return Most of 4,000 BTC Once Flaw Is Patched
AI Market Summary
Galaxy's research lead reports a critical Liquid Network vulnerability that a white-hat exploited to obtain ~4,000 BTC, with intent to return "most" funds once the patch is deployed and nodes are upgraded. While the cooperative stance reduces ultimate loss risk, the incident highlights bridge/sidechain security and operational patching risk, which can briefly weigh on Bitcoin-related risk appetite and custody confidence.
Impact level
● Medium
Affected assets
BTC/USDT-0.17%
AI Insight · BTC/USDTAI Insight
● Neutral
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Galaxy Research head Alex Thorn (@intangiblecoins) said the Liquid Network has confirmed a critical security vulnerability that was exploited by a white hat to obtain about 4,000 BTC. According to Thorn, the hacker contacted Blockstream using Bitcoin on-chain OP_RETURN messages as well as PGP-encrypted communications, and sent 1,000 satoshis to a federal wallet as a signal of intent to return "most" of the funds after the issue is fixed.
The hacker asked Blockstream to prioritize patching the vulnerability and ensure all nodes are updated before any transfer back takes place, stating the funds would be returned securely once the remediation is complete. Thorn added that the technical details have been provided to Blockstream via PGP encryption and are only readable by Blockstream.
