Bitcoin: Blockstream Maintains Its Refusal to Pay Liquid Hackers

The Liquid network is going through a stage of its security incident. After the withdrawal of thousands of bitcoins, Blockstream now refuses all ransom demands. The company states it wants to recover the remaining funds without paying a financial reward. It plans to work with law enforcement, exchange platforms, and digital forensic experts. Liquid has resumed its block production but keeps bitcoin transfers suspended.

Blockstream rejects hackers’ demand

Blockstream has stated it will not pay the hackers to recover the funds held by Liquid. The company considers unauthorized asset seizure as theft. It says it has communicated with the perpetrators to encourage restitution but refuses their financial demands.

According to a message released Wednesday on the blockchain by Samson Mow, the hackers demand a 10% premium taken from its funds. They claim refusal would cause a 15% loss for Liquid holders. This demand follows the initial withdrawal of about 4,000 bitcoins from the federated wallet. A significant portion of the assets has already returned to network control.

On September 6, Liquid suspended its operations after this attack. The hackers, who presented themselves as “white hats,” withdrew about 4,000 BTC, worth nearly 320 million dollars. Subsequently, they returned 3,400 BTC after announcing fixes for the affected bridge nodes. About 598 BTC remain still outstanding at this stage.

The company prepares tracking of remaining funds

In this situation, the company asks the hackers to return the bitcoins still held. The company has announced cooperation with law enforcement to pursue investigations. Exchanges, service providers, and digital forensic specialists will also participate in tracking the assets. This approach aims to trace financial movements and identify the responsible parties.

Meanwhile, Liquid resumed block production on Thursday after emergency software updates. The network currently produces empty blocks while transactions remain suspended. Bitcoin transfers to and from Liquid are also still interrupted. This resumption does not yet signify a full operational return.

The next steps will depend on the return of funds and asset tracking. Blockstream will need to coordinate the various parties involved, while investigators aim to trace the concerned BTC. This procedure will determine the next phases for Liquid. For now, Blockstream maintains its refusal to pay, and the network continues its operations under restrictions.