Blockstream Refuses Ransom Demand Over Remaining Bitcoin From Liquid Network Hack

Bitcoin infrastructure firm Blockstream has confirmed it will not pay a ransom to recover the remaining Bitcoin still held by hackers who exploited its Liquid Network. The company stated that taking funds without authorization and refusing to return them constitutes theft rather than legitimate security research.

Blockstream said it had attempted good faith negotiations to recover user funds but rejected demands from the attackers, who sought a 10% bounty payment from the company’s own reserves. The hackers reportedly warned that Liquid users would otherwise face significant financial losses if their demands were not met.

Most Funds Already Returned After Network Vulnerability Patched

The security incident began earlier this month when Liquid, a Bitcoin sidechain network, paused operations after unknown actors withdrew approximately 4,000 Bitcoin from its federation wallet, valued at roughly $320 million at the time. The attackers later returned the majority of the funds after Blockstream confirmed the affected vulnerability had been patched, leaving about 598 Bitcoin still unaccounted for.

Blockstream said it would pursue recovery efforts through law enforcement, crypto exchanges, and forensic investigators if the remaining funds are not voluntarily returned. The Liquid network has since resumed limited block production following emergency software updates, though transaction processing and Bitcoin transfers remain temporarily suspended while security measures are finalized.