Chain WhispersThe Liquid Network hack (September 2026)
On 6 September 2026 a bug in Elements, the software behind Blockstream's Liquid sidechain, let an attacker create about 4,000 L-BTC from nothing and withdraw about 3,996 real BTC. Calling themselves white hats, they talked to Blockstream in Bitcoin OP_RETURN messages, returned 3,400 BTC, kept about 598 and asked for a 10% bounty, which Blockstream refused as a ransom. Around them: a smear campaign against Blockstream, a memecoin named after the hacker, people begging the hacker for coins, and copies of the public statements written into the chain.
Open the live timeline 345 messages so far, written into Bitcoin
Key messages and news
- News: An outside security researcher reports the bug to Blockstream; a fix the next day misses a related edge case (per Blockstream's 23 Sep assessment). source
- News: The exploit: about 4,000 L-BTC minted without backing and about 3,996 BTC (~$320M) withdrawn. Blockstream: a software bug in Elements, no keys compromised. source
- The attacker's first message: 'we are whitehats'
we are whitehats. contact us on chain
transaction c103de95817b43f2… - Reply an hour later: contact Blockstream security
Please contact [email protected]
transaction 91271efcbb5ab29a… - A message signed with Blockstream's security PGP key
Encrypted to the key behind bc1ql4mfu6aundtkksxklfajs2h3t9nzcd6gyqjlte (Electrum BIE1 ECIES): QklFMQLaSmCm5qeNvxcJnaVGKqIVzH5Y3oL2OrBYayfMegxjxLWEAzoQ65PcqzgkWdj+3KyQBOel5JDKGiAwvt5jwZjsrch0CgDNMrqzsVWBfMD5gdMy79ngeankI4rog7V9pko= Detached signature by [email protected]. Public key: https://blockstream.com/pgp.txt Fingerprint: 1176 542D A98E 71E1 3372 2EF7 4AC8 CC88 6844 A2D6 Verify: gpg --import pgp.txt && gpg --verify msg.asc msg.b64 -----BEGIN PGP SIGNATURE----- iQIzBAABCgAdFiEEEXZULamOceEzci73SsjMiGhEotYFAmqeD+sACgkQSsjMiGhE otYifg//XZFx8WQGQhzzAWoCOGJGio3O7sg1MPbZyhaY7AJNGuzSdrsWnr
transaction bd81219691eb1e22… - The attacker: fix the bug first, then the money comes back; details encrypted to Blockstream's key
Please fix the bug first. The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix. The detail is as follows (encrypted using https://blockstream.com/pgp.txt). -----BEGIN PGP MESSAGE----- hQIMA7szLTHLpE7fAQ//e+6nCR6qz7BevVfT6JPweB0ZWoRkJsUxOb8AXLFDhEJh by7cnFBSLLlN9BK9g5PYIMDrRiYCIvDtDq2GquhaYKfRKVFWRqA8meH+/yOm3ZBK 6j7lAXWrPjvvauDONI6avEqIORlsjmDZO4o2JcUlwX4u7Ovbc+ViqH5UrtSWB9N5 M3yxXyve0QMSsECbSG7TJy6OJn1C8nX/eCFKg4VBY5b+VAGRvxq2nmJ4hmQrbU/n fdj4SuohMvV1l1Jt2Fc/SXCSZZQ3zDrWkDXWOUzYl+nvG68gTdSxO7i
transaction 83825b2135dd0aba… - A bounty offer (98 BTC); who sent it is not known: Blockstream or an impersonator
Thank you for finding the bug, we are working on a fix immediately, please send 3900 Bitcoin back to this address, you may keep the 98 BTC as Bounty reward.
transaction 9766ca28b1ddf509… - The smear campaign begins
Blockstream is running a ponzi scheme This theft is an inside job google NatInfoSec Adam Back
transaction 1c05ef17ff552f8f… - News: The attackers return 3,400 BTC and keep about 598; they ask for a 10% bounty from Blockstream's own funds, warning holders could otherwise face a ~15% shortfall. source
- News: A fixed Elements release (v23.3.4) is deployed. Reported cause: a range-proof verification cache bug; the fake L-BTC was redeemed through SideSwap's peg-out key, which Blockstream says was not compromised. source
- The 10% demand in the attacker's words (likely the attacker; not proven)
Your dereliction of duty is obvious that you allocated only $1.5M (maybe even 0) to secure $5B assets. This is a flagrant neglect of security and a sign of complete mismanagement. You SHALL pay 10% using your own money as bug bounty or you will cause all your holders a 15% loss for your irresponsibility and stinginess. Even companies that participate in bug bounty programs cannot guarantee complete security, let alone one like yours that remains delusional, greedy, and arrogant to this very day. Anyway we are going to publish the privatekey to decrypt our conversations afterwards.
transaction f7055f6c8dd00f40… - News: Liquid restarts block production; peg-outs stay paused. Adam Back says the L-BTC peg will be covered 1:1. source
- News: Blockstream on X: it will not pay a ransom; withholding the coins 'is a crime, not responsible disclosure'. source
- News: Blockstream: if the bitcoin is not returned it will work with law enforcement, exchanges, service providers and forensic investigators to trace it. source
- Blockstream's 'we will not pay a ransom' statement, copied from X
Blockstream message to the hacker, posted on X (relayed by an independent observer): To those responsible for the theft of bitcoin from the Liquid Network: Blockstream will not pay a ransom for the return of stolen funds. Taking assets without authorization and withholding their return is a crime, not responsible disclosure. It is not white-hat activity. It is theft. We have engaged in good faith in an effort to secure the return of stolen user funds and protect the broader Bitcoin community. That effort should not be mistaken for acceptance of the actions taken nor of the terms being demanded
transaction 4dc2002c630071ba… - Samson Mow's post on bounty vs ransom, copied from X
Message from Samson Mow on X (relayed by an independent observer): Message from Samson Mow on X (relayed by an independent observer): Disclaimer: I haven't been CSO at @Blockstream for a few years now and these are my own takes. I'm currently CEO at @JAN3com and a member of the @Liquid_BTC Technology Board. The reactions to this post from Blockstream are quite unbelievable. A lot of people are actually arguing it isn't really theft because a bug made it possible, or that paying the ransom would have been the reasonable thing to do because the hackers returned some of the stolen funds. I'd be
transaction 88d1f8bd8a42ebe3… - News: Liquid update: 3,400 of ~4,000 BTC returned, about 600 still missing; peg-outs resume only once 1:1 backing is confirmed. source
- News: Blockstream publishes its incident assessment (the bug was reported on 2 August). source
- News: Late September: peg-outs still disabled; SideSwap says L-BTC cannot yet be redeemed for bitcoin. No report of a settlement or of peg-outs resuming since. source
- An offer to the attacker: return 200 BTC, keep 10%, 'we will not engage with law enforcement…': the reverse of Blockstream's 11 September wording; no news report of it, sender not known
Okay, mr. white hat won. Send the 200 BTC to this address and the remaining 10% will be your reward. We will not engage with law enforcement, exchanges, service providers, forensic specialists, or other relevant parties to trace or recover the assets or identify those responsible.
transaction 06c219142dd3e530…
Messages are what people wrote into transactions; the news is what the press reported. Neither is checked by us.