Blockstream Says It Will Not Pay a Ransom for Liquid's Missing 598.5 BTC. The Demand Was Written On-Chain.
Blockstream said at 05:25 UTC on September 11 that it "will not pay a ransom for the return of stolen funds" taken from the Liquid Network, calling the exploit "a crime, not responsible disclosure" and adding that "Bitcoin doesn't haircut users to pay a ransom"; if the coins are not returned it says it will pursue "every lawful avenue," working with law enforcement, exchanges and forensic specialists. The terms it is refusing are on the Bitcoin chain: at 11:45 UTC on September 9 the address holding the retained coins sent the Liquid federation address a message demanding that Blockstream "pay 10% using your own money as bug bounty" or "cause all your holders a 15% loss," and moved its full 598.5 BTC balance back to itself in the same transaction. Liquid's operators said at 19:55 UTC on September 10 that block production and transactions have resumed on Elements v23.3.4 with peg-outs still disabled; as of 13:20 UTC today the actors' address still holds 598.5 BTC and the federation address about 3,601 BTC.
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