Liquid Network Resumes Block Production Following 3,400 BTC Recovery, but Transfers and Bridging Remain Suspended
AI Market Summary
Liquid has resumed block production but still is not processing transactions, leaving BTC–Liquid bridging, withdrawals, and LBTC redemptions paused. The halt followed an Elements range-proof validation flaw that enabled uncollateralized LBTC to be redeemed for ~3,996 BTC, draining federation reserves; ~3,400 BTC was returned but ~598.5 BTC remains outstanding. Continued suspension elevates counterparty and settlement risk for BTC sidechain users and related liquidity venues.
Impact level
● Medium
Affected assets
BTC/USDT-1.79%
AI Insight · BTC/USDTAI Insight
▼ Bearish
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Bitcoin sidechain Liquid Network has resumed empty block generation following an emergency shutdown triggered by an unauthorized 3,996 BTC withdrawal valued at roughly $320 million, according to reports compiled by CoinMarketCap. The protocol's function nodes completed the Elements v23.3.4 emergency security patch, resolving a critical range-proof verification caching vulnerability that permitted attackers to mint unbacked Liquid Bitcoin (LBTC) through SideSwap. While consensus signing has resumed, standard user transfers, PAK-authorized redemptions, and the two-way Bitcoin peg-in and peg-out bridge remain paused while engineers validate state consistency. Lead developer Blockstream confirmed that 3,400 BTC (approximately $270 million) has been recovered via on-chain communications, though 598.5 BTC remains outstanding amid public skepticism from Ledger CTO Charles Guillemet over whether the retention constitutes an authorized vulnerability bounty.
