L-BTC Peg-Out Still Shut Down as Blockstream Refuses Hacker Demand

Eleven days after an exploit drained nearly 4,000 BTC from the Liquid Network on September 6, L-BTC to BTC peg-out redemptions remain completely disabled. Although the attackers returned approximately 3,400 BTC (around 85% of the stolen funds), they continue to retain 598.50 BTC worth more than $45 million. Blockstream, the core developer behind the Liquid Network, has refused to yield to hacker demands or pay a bounty for the remaining coins, demanding the full return of the assets. Currently, a reserve deficit persists on the Liquid Network, with 4,234.76 L-BTC in circulation against only 3,632.23 BTC held in reserves. Blockstream founder Adam Back has stated that the 1:1 peg will be fully covered and advised holders not to sell L-BTC at a discount over-the-counter, yet no timeline has been provided for reopening peg-outs. The incident occurs alongside security breaches at Symbiosis and Nomic, sparking heightened scrutiny over the security and governance models of Bitcoin-backed sidechains, bridges, and Layer 2 platforms.