bitcoin ·
Liquid Network says LBTC is fully backed again after September hack
Liquid Network has restored full Bitcoin backing for its LBTC tokens nearly two months after a software exploit drained most of the sidechain's reserves, although direct withdrawals remain restricted.
3 outlets · crypto.news · theblock.co · unchainedcrypto.com
In a Tuesday statement, the Liquid Federation confirmed that reserves were “fully restored, reestablishing 1:1 BTC backing for all LBTC.” The announcement followed several Bitcoin transfers into the federation's reserve wallet, including a final 250 BTC deposit on November 2.
Blockchain records showed about 4,268.95 BTC backing an equivalent amount of LBTC when the shortfall was closed. Update from the Liquid Federation: The Liquid Federation is pleased to announce that the network’s bitcoin reserves have been fully restored, reestablishing 1:1 BTC backing for all LBTC.
This follows the restoration of BTC LBTC swaps several weeks ago, which have since allowed… The recovery followed a September 6 attack involving Elements, the open-source software used by Liquid Network. In its security incident assessment, Blockstream explained that a flaw in transaction verification allowed an attacker to create around 4,000 LBTC without depositing the corresponding Bitcoin.
The attacker then converted those tokens into actual BTC through SideSwap, a federation member authorized to process withdrawals. Liquid's reserves fell from about 4,205 BTC to 197 BTC as a result of the unauthorized transactions and other withdrawals completed before operations stopped.
