Blockstream pauses Liquid Network after $340M theft
Most of the stolen bitcoin was later returned after a reported bug fix, but Liquid Network remains offline as Blockstream works on more security changes.
A hacker stole about $340 million in bitcoin from Liquid Network, a settlement network used by several cryptocurrency exchanges, in one of the largest known crypto thefts of the year. The case drew immediate attention not just because of the size of the loss, but because the attacker later said the funds would be returned if a bug was fixed.
Blockstream, the crypto firm behind Liquid Network, said the network’s operations were paused while the incident is being resolved. Former Blockstream executive Samson Mow later said the bug had been fixed and that most of the stolen funds had already been sent back, as IT-PUB News reports.
Liquid Network lost thousands of bitcoins
According to Blockstream’s post on X on Sunday, the money was taken from Liquid Network’s wallet by what the company described as a “white hat” hacker. The network launched in 2018 and is used by several cryptocurrency exchanges for settlement.
The stolen amount was thousands of bitcoins, worth around $340 million at the time of the heist. That alone makes the incident stand out. The theft is also being tracked by the Rekt leaderboard, which follows digital asset thefts, as one of the largest crypto heists to date.
Blockstream has not identified the hacker. Crypto media reports said the attacker may have exploited a bug to withdraw the funds. That detail has not been independently confirmed in the source text, but it helps explain why the incident quickly became more than a straightforward theft case.
The attacker tied the return of funds to a bug fix
What made the incident especially unusual was the hacker’s stated condition for giving the money back. According to the source, the attacker said the funds would be returned if Blockstream fixed the bug.
By Monday, Samson Mow said on X that the company had done so. He also said that around 3,400 of the roughly 4,000 stolen bitcoins had been returned. That left about 600 bitcoins, worth around $47 million, still under the hacker’s control.
The sequence points to something larger than a theft alone. It suggests there was a vulnerability in the network’s setup. For a settlement system, that matters: these platforms are used to move funds between exchanges and other participants, and they depend on a high level of trust. A weakness there can quickly raise doubts about how digital assets are being handled.
Blockstream keeps the network paused
Even after most of the stolen funds were returned, Blockstream did not immediately bring Liquid Network back online. Mow said operations would remain paused until additional fixes and security improvements were completed before a restart.
That matters for users and exchanges that rely on the network. A settlement system only works if participants believe transfers are secure and stable. Restart it too quickly, and unresolved weaknesses could create another problem. Keep it offline too long, and the exchanges that use it may face disruption in moving funds.
The source does not say how long the pause will last or what the additional fixes will involve. Still, the decision to keep the system offline shows Blockstream is treating the episode as more than a one-off loss and focusing on the underlying security issue.
The theft raises new trust questions for crypto firms
The incident underscores a persistent problem in the digital asset sector: even systems built for settlement and exchange infrastructure can be exposed if there is a software bug. For users, that can mean delays, uncertainty, and fresh questions about where funds are stored and how quickly they can be moved.
For businesses, especially exchanges and other crypto services, the case is a reminder that technical vulnerabilities can have immediate financial consequences. A flaw in a wallet or network can lead not only to losses, but also to service interruptions and emergency fixes.
The return of most of the money does not make the theft less serious. It does make the case unusual. In many crypto hacks, stolen funds are hard to recover. Here, the attacker’s condition for returning the bitcoin appears to have been tied to the repair of the bug — an odd turn in an already major security incident.
For now, Liquid Network remains paused, and about $47 million in bitcoin is still not back under the company’s control. Even with much of the money returned, the episode leaves a harder problem behind: the damage a security failure can do to trust in the systems meant to protect those funds.
