Every LBTC on the Liquid Network is backed by a real bitcoin again, almost two months after a software bug let an attacker drain nearly all of them.
Liquid is a Bitcoin sidechain run by a federation of firms led by Blockstream, used by exchanges and traders to move bitcoin faster than the main network allows. Users lock $BTC with the federation and get LBTC in return, a token that’s supposed to be redeemable for one bitcoin at any time.
That backing broke on Sept. 6. A bug in Liquid’s software let an attacker mint about 4,000 LBTC with nothing behind them and redeem them for real bitcoin.
The bitcoin reserve dropped from about 4,205 $BTC to 197, according to Blockstream’s incident report at the time. The attacker, who claimed to be a white hat, returned 3,400 $BTC the next day, leaving about 600 $BTC missing.
That hole is now closed. The Liquid Federation said on X on Monday that reserves were “fully restored, reestablishing 1:1 $BTC backing for all LBTC,” after a final 250 $BTC transfer. Anyone can check the balance on the network’s public dashboard, it said.
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