{"id":79369,"date":"2026-10-11T16:34:14","date_gmt":"2026-10-11T16:34:14","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/liquid-network-at-86-backing-as-bitcoin-redemption-freeze-drags-on-bitcoin-news\/"},"modified":"2026-10-11T16:34:14","modified_gmt":"2026-10-11T16:34:14","slug":"liquid-network-at-86-backing-as-bitcoin-redemption-freeze-drags-on-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/liquid-network-at-86-backing-as-bitcoin-redemption-freeze-drags-on-bitcoin-news\/","title":{"rendered":"Liquid Network at 86% Backing as Bitcoin Redemption Freeze Drags On \u2013 Bitcoin News"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">As of Oct. 11, 2026, Liquid Network\u2019s peg-out operations remain frozen 35 days after an exploit drained nearly 4,000 BTC.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Attackers returned 3,400 BTC but still hold 598.5 BTC worth $49.69 million, leaving the protocol\u2019s creators frustrated.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Blockstream faces growing criticism as an external security audit continues with no date for restoring peg-outs.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Liquid Network Peg-Outs Remain Frozen as 598.5 BTC Stays in Attacker\u2019s Wallet<\/h2>\n<p>Liquid users are still unable to redeem LBTC for bitcoin, with the protocol\u2019s peg-out operations still suspended. The ordeal began <a href=\"https:\/\/news.bitcoin.com\/security\/we-are-whitehats-nearly-4000-btc-drained-from-blockstreams-liquid-peg\/\">more than a month ago<\/a> when self-described white hat hackers exploited the layer two (L2) network and made off with nearly 4,000 BTC.<\/p>\n<p>By Sept. 7, 2026, the attackers had returned approximately 3,400 BTC but retained 598.5 BTC, insisting that Blockstream, Liquid\u2019s creator, owed them a 10% bounty. Blockstream <a href=\"https:\/\/news.bitcoin.com\/crypto-news\/return-the-bitcoin-blockstream-draws-line-after-4000-btc-hack\/\">rejected that proposition<\/a> outright and demanded the immediate return of the remaining bitcoin.<\/p>\n<figure id=\"attachment_855119\" aria-describedby=\"caption-attachment-855119\" style=\"width:2342px\" class=\"wp-caption aligncenter\"><figcaption id=\"caption-attachment-855119\" class=\"wp-caption-text\">The Liquid Network attackers\u2019 wallet with 598.5 BTC, worth $49.69 million on Sunday, Oct. 11, 2026. Image source: Mempool.space.<\/figcaption><\/figure>\n<p>That demand has apparently fallen on deaf ears, and more than a month later, the situation remains at a standstill. The attacker\u2019s <a href=\"https:\/\/mempool.space\/address\/bc1ql4mfu6aundtkksxklfajs2h3t9nzcd6gyqjlte\" target=\"_blank\" rel=\"noopener noreferrer\">wallet still holds 598.5 BTC<\/a>, currently valued at $49.69 million, while the address continues to attract a barrage of address-poisoning attempts and peculiar messages embedded in OP_RETURN transactions.<\/p>\n<h2>Blockstream Faces Mounting Criticism as Liquid Users Lose Patience<\/h2>\n<p>Liquid users have grown increasingly frustrated with the prolonged disruption, having spent weeks waiting for LBTC-to-BTC swaps to resume. One longtime Blockstream supporter expressed their disillusionment on X, admitting that the company\u2019s handling of the Liquid Network incident had begun to erode their confidence in it.<\/p>\n<p>\u201cI hate to say this but I am disappointed with Blockstream\u2019s [handling] of the Liquid Network drain. Communications have been sparse and inconsistent,\u201d the <a href=\"https:\/\/x.com\/SVRN_Money\/status\/2107327908939497527?s=20\" target=\"_blank\" rel=\"noopener noreferrer\">X user Sovereign Money wrote<\/a>.<\/p>\n<p>The account added:<\/p>\n<blockquote>\n<p>\u201cThere still is no Peg-out service available, and the Liquid network is still sitting at 86% backing. So 14% of every holder\u2019s assets are gone. I feel for the people who went all-in on the Liquid Network and Blockstream.\u201d<\/p>\n<\/blockquote>\n<h2>External Security Audit Underway as Liquid Federation Works to Restore Peg-Outs<\/h2>\n<p>The Liquid Network did release an update on Sept. 29, 2026, noting that peg-out operations were still down. \u201cAn independent external security audit of Elements v23.3.4 is now underway, providing an additional layer of validation as we work toward the safe restoration of peg-out operations,\u201d <a href=\"https:\/\/x.com\/Liquid_BTC\/status\/2104810639730299275?s=20\" target=\"_blank\" rel=\"noopener noreferrer\">Liquid\u2019s X account said<\/a>. \u201cIn parallel, the Liquid Federation is coordinating an update to the PAK list, including the replacement of existing entries and ensuring all peg out keys are properly secured in cold storage.\u201d<\/p>\n<p>Liquid Network\u2019s social media account added:<\/p>\n<blockquote>\n<p>\u201cThese efforts are important steps toward resuming secure peg-out operations.\u201d<\/p>\n<\/blockquote>\n<p>When peg-out operations will resume remains anyone\u2019s guess, but some LBTC holders have decided they are done waiting. <a href=\"https:\/\/x.com\/lukedewolf\/status\/2109199466867695897?s=20\" target=\"_blank\" rel=\"noopener noreferrer\">Several discussions<\/a> circulating on social media detail how users have managed to move their funds through alternative applications, effectively finding ways around the prolonged suspension.<\/p>\n<p>\u201cI ended up paying the \u2018Not your keys, not your coins\u2019 tax to get my Bitcoin out of the [Liquid Network],\u201d <a href=\"https:\/\/x.com\/QLD_HODL\/status\/2109093465141444709?s=20\" target=\"_blank\" rel=\"noopener noreferrer\">one person explained<\/a>. \u201cIt cost ~5% in spread and fees across Sideswap and Sideshift.ai, taking weeks to migrate due to lack of liquidity, but the peace of mind was worth it.\u201d<\/p>\n<div class=\"not-prose my-3 lg:my-4\">\n<div class=\"overflow-hidden rounded-lg !bg-[#E8EDFA] p-[9px] hidden md:flex md:flex-row md:gap-3 lg:hidden\"><a aria-hidden=\"true\" tabindex=\"-1\" class=\"relative size-[150px] min-w-[150px] shrink-0 overflow-hidden rounded-[15px]\" href=\"https:\/\/news.bitcoin.com\/l-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand\/\"><img alt=\"L-BTC Peg-Out Still Shut Down as Blockstream Refuses Hacker Demand\" loading=\"lazy\" decoding=\"async\" data-nimg=\"fill\" class=\"object-cover\" style=\"position:absolute;height:100%;width:100%;left:0;top:0;right:0;bottom:0;color:transparent\" sizes=\"150px\" srcset=\"\/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=32&amp;q=75 32w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=48&amp;q=75 48w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=64&amp;q=75 64w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=128&amp;q=75 128w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=256&amp;q=75 256w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=384&amp;q=75 384w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=640&amp;q=75 640w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=828&amp;q=75 828w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1080&amp;q=75 1080w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1200&amp;q=75 1200w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1920&amp;q=75 1920w\" src=\"https:\/\/news.bitcoin.com\/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1920&amp;q=75\"\/><\/p>\n<div class=\"absolute left-2 top-2\"><img alt=\"Bitcoin.com News\" loading=\"lazy\" width=\"28\" height=\"28\" decoding=\"async\" data-nimg=\"1\" class=\"size-7\" style=\"color:transparent\" srcset=\"\/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=32&amp;q=75 1x, \/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=64&amp;q=75 2x\" src=\"https:\/\/news.bitcoin.com\/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=64&amp;q=75\"\/><\/div>\n<p><\/a><\/div>\n<div class=\"overflow-hidden rounded-lg !bg-[#E8EDFA] p-[9px] hidden lg:flex lg:flex-row lg:gap-4\"><a aria-hidden=\"true\" tabindex=\"-1\" class=\"relative size-[150px] min-w-[150px] shrink-0 overflow-hidden rounded-[15px]\" href=\"https:\/\/news.bitcoin.com\/l-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand\/\"><img alt=\"L-BTC Peg-Out Still Shut Down as Blockstream Refuses Hacker Demand\" loading=\"lazy\" decoding=\"async\" data-nimg=\"fill\" class=\"object-cover\" style=\"position:absolute;height:100%;width:100%;left:0;top:0;right:0;bottom:0;color:transparent\" sizes=\"150px\" srcset=\"\/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=32&amp;q=75 32w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=48&amp;q=75 48w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=64&amp;q=75 64w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=128&amp;q=75 128w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=256&amp;q=75 256w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=384&amp;q=75 384w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=640&amp;q=75 640w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=828&amp;q=75 828w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1080&amp;q=75 1080w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1200&amp;q=75 1200w, \/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1920&amp;q=75 1920w\" src=\"https:\/\/news.bitcoin.com\/_next\/image\/?url=https%3A%2F%2Fstatic.news.bitcoin.com%2Fwp-content%2Fuploads%2F2026%2F09%2Fl-btc-peg-out-still-shut-down-as-blockstream-refuses-hacker-demand-150x150.png&amp;w=1920&amp;q=75\"\/><\/p>\n<div class=\"absolute left-2 top-2\"><img alt=\"Bitcoin.com News\" loading=\"lazy\" width=\"28\" height=\"28\" decoding=\"async\" data-nimg=\"1\" class=\"size-7\" style=\"color:transparent\" srcset=\"\/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=32&amp;q=75 1x, \/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=64&amp;q=75 2x\" src=\"https:\/\/news.bitcoin.com\/_next\/image\/?url=%2Fimages%2Fuploads%2Fbitcoin_news_newlogo.svg&amp;w=64&amp;q=75\"\/><\/div>\n<p><\/a><\/p>\n<div class=\"flex min-w-0 flex-1 flex-col justify-center gap-2\">\n<p class=\"m-0 line-clamp-2 text-base leading-[1.3] !text-[#67656E]\">It\u2019s been 11 days since the so-called white hat hackers siphoned nearly 4,000 BTC from the Liquid Network. Since then,\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/crypto-news\/liquid-network-at-86-backing-as-bitcoin-redemption-freeze-drags-on\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways As of Oct. 11, 2026, Liquid Network\u2019s peg-out operations remain frozen 35 days after an exploit drained nearly 4,000 BTC. Attackers returned 3,400 BTC but still hold 598.5 BTC worth $49.69 million, leaving the protocol\u2019s creators frustrated. Blockstream faces growing criticism as an external security audit [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":79370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/79369"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=79369"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/79369\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/79370"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=79369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=79369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=79369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}