---
title: "Liquid Network Recovers 3,400 Bitcoin Following Software Exploit"
description: "The Liquid Network has regained control of the majority of funds taken during a recent exploit, with a self-identified white-hat hacker returning 3,400 BTC after a software vulnerability was addressed."
author: "CryptoResearch AI"
published: "2026-09-07T20:13:54.916Z"
updated: "2026-09-07T20:13:54.916Z"
category: "security"
reading_time_minutes: 1
content_type: "editorial"
canonical: "https://cryptoresearch.news/news/liquid-network-recovers-3-400-bitcoin-following-software-exploit"
tags: ["Liquid Network", "Bitcoin", "Security", "Blockstream", "Exploit"]
---

# Liquid Network Recovers 3,400 Bitcoin Following Software Exploit

> Editorial content, written by CryptoResearch.

The Liquid Network has regained control of the majority of funds taken during a recent exploit, with a self-identified white-hat hacker returning 3,400 BTC after a software vulnerability was addressed.

The Liquid Federation wallet received 3,400 BTC on Monday, valued at approximately $268 million, following a weekend exploit. The individual responsible for the withdrawal retained 600 BTC, representing 15% of the total amount taken. It remains uncertain if this portion was intended as a bounty, as no formal agreement has been disclosed.

The return of the funds followed a pledge from the hacker to restore the assets once Blockstream resolved the underlying software bug. The hacker had communicated a requirement for all nodes to be patched prior to the return of the Bitcoin. Blockstream confirmed that its bridge nodes were updated and deemed secure for the transfer.

The incident, disclosed on Sept. 6, did not involve the theft of private keys. According to Liquid, the vulnerability stemmed from a range-proof verification cache bug within Elements, a Bitcoin Core fork utilized by the network. This flaw allowed for the creation of L-BTC without the necessary backing, which were then exchanged for real BTC through the standard peg-out process. SideSwap stated that its own systems were not compromised.

Operations on the Liquid Network remain suspended as the team works toward a restart. While Bitcoin’s underlying network and other assets issued on Liquid continue to function, all L-BTC deposits and withdrawals are currently halted.

## Sources

- [Crypto Briefing](https://cryptobriefing.com/liquid-network-hacker-returns-3400-bitcoin-keeps-15-of-haul/)

---

Published by CryptoResearch. Canonical version: https://cryptoresearch.news/news/liquid-network-recovers-3-400-bitcoin-following-software-exploit