The Liquid Network has fully restored its Bitcoin reserves, achieving a 1:1 backing for all LBTC tokens. This milestone comes two months after an incident where approximately 4,000 BTC, valued at $320 million, were withdrawn from the network's federation wallet.
Following the unauthorized withdrawal on September 6, the attackers returned 3,400 BTC. Blockstream, the developer behind the sidechain, refused to pay a ransom for the remaining 598 BTC. The network has now confirmed that its assets match liabilities at 100%, with a reserve deficit of 0.00 BTC.
To prevent future incidents, CEO Adam Back stated that the network has implemented several security upgrades. These include moving peg-out authorization keys to cold hardware wallets, disabling proof validation caches, and hardening consensus rules to fail closed. The network has also undergone multiple third-party audits.
The Liquid Federation is currently modernizing its governance structure to improve oversight and operational security. Users operating their own Liquid nodes can verify the current reserve status directly. Further details regarding the updated operational safeguards are expected in the coming weeks.
