White-hat actors returned 3,400 BTC to the Liquid Federation wallet after Blockstream patched the bridge nodes. The transaction was included in Bitcoin block 965950.
The September 6 incident saw roughly 4,000 unbacked L-BTC created through a vulnerability in the Elements rangeproof verification cache. These tokens were used to peg out approximately 3,996 BTC via SideSwap's authorization key.
The federation reserve fell from over 4,200 BTC to 197 BTC. Actors identified themselves on-chain and conditioned the return on a patch deployment.
Blockstream issued a signed on-chain message stating the nodes were patched. The 3,400 BTC return followed immediately.
Approximately 598.5 BTC remains with the actors. The network remains paused pending a coordinated restart and resolution of a chain split.
Post-mortem signals include the peg-out mechanism, emergency patch process, and partial recovery of reserves.
Liquid Network project acknowledgment + multi-outlet corroboration (The Block, Cointelegraph, CoinDesk); on-chain tx 965950