Blockstream Rejects $50M Bounty Demand From Liquid Hacker
Blockstream won't hand over nearly 600 Bitcoin demanded by the attacker who exploited the Liquid sidechain.
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Key takeaways
- Blockstream rejected a 600 BTC ($50M) bounty demand from the Liquid attacker.
- The Sept. 6 exploit allowed the hacker to mint 4,000 unbacked L-BTC and drain 3,996 real BTC.
- The standoff escalates debate around returning stolen crypto for massive ransom fees.
Blockstream isn't backing down. The protocol builder just flatly rejected an attacker's demand for nearly 600 Bitcoin—roughly $50 million—to settle the recent breach of its Liquid Network.
Here is how the mechanism failed on Sept. 6. A critical vulnerability in the sidechain logic allowed the attacker to mint about 4,000 unbacked L-BTC out of thin air. They promptly ran those synthetic tokens through the network bridge, draining roughly 3,996 real Bitcoin from the reserve vaults.
Negotiations died when the attacker asked to keep nearly 600 BTC as a fee for returning the remaining funds. Blockstream shut down the deal instantly. That refusal cuts off the standard post-hack bargaining, turning the incident into a hard standoff.
Why it matters
DeFi teams usually roll over. They let exploiters walk away with stolen funds under the polite label of a "white hat bug bounty." Blockstream is drawing a line. By saying no to a $50 million payout, the firm is pushing back against extortion framed as security research. If you trade on sidechains or hold wrapped assets, pay attention. It indicates major infrastructure teams might finally favor legal channels and on-chain tracking over cutting multi-million-dollar checks to attackers.
Source: CryptoSlate
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Mia digs into DeFi and on-chain data, translating protocol mechanics into plain English for everyday readers.
