Tag: Blockstream

  • Bitcoin Miner Jiang Zhuoer Sells Entire BTC Holdings at $77,226; Blockstream Refuses Ransom Demand

    Bitcoin Miner Jiang Zhuoer Sells Entire BTC Holdings at $77,226; Blockstream Refuses Ransom Demand

    Chinese mining pool operator Jiang Zhuoer has liquidated his entire Bitcoin position at $77,226 per BTC, marking a full exit from the cryptocurrency. The move comes amid rising expectations of a Federal Reserve rate hike after stronger-than-expected U.S. Producer Price Index data. Separately, Blockstream has rejected a ransom demand linked to the unauthorized transfer of approximately 4,000 BTC from the Liquid Network, with about 3,400 BTC already returned and 598.5 BTC still outstanding.

    Jiang Exits Bitcoin

    Jiang, founder of the BTC.TOP mining pool, confirmed he sold 100% of his Bitcoin holdings at $77,226. A day earlier, he noted that stronger U.S. Producer Price Index data increased the probability of a Federal Reserve rate hike to 70%. He also predicted that the next Consumer Price Index (CPI) reading would negatively impact markets. Jiang said he could open a short position if market conditions align with his strategy, though it remains unclear whether he will follow through if inflation data further hardens expectations for Fed policy.

    The sale contrasts with Jiang’s previously bullish comments. He had stated he was 90% certain the bear market had ended and expected Ethereum to outperform Bitcoin. He also planned to use remaining reserve funds to buy ETH, but the supplied information does not confirm whether that purchase was completed.

    Blockstream Rejects Ransom

    Blockstream announced it rejected a ransom demand linked to the Bitcoin that was moved without authorization from the Liquid Network. The company stated that the actors have returned approximately 3,400 BTC, leaving around 598.5 BTC outstanding. Blockstream emphasized it would not pay for the return of the Bitcoin or shift recovery costs to users.

    Earlier communications had described the actors as white hats, but Blockstream later rejected that label after the group withheld funds while demanding payment. Blockstream said it engaged in good faith to recover user funds but argued that paying a ransom would set an unacceptable precedent for open-source Bitcoin infrastructure.

    If the remaining funds are not returned, Blockstream plans to pursue lawful recovery channels, including law enforcement, exchanges, service providers, and forensic specialists. The company also highlighted Bitcoin’s public transaction history, which investigators can use to trace transferred assets and support recovery efforts.

    Liquid Accountability Questioned

    A citizen journalist challenged Blockstream’s framing of the dispute as a defense of Bitcoin principles, arguing that Liquid should remain separate from Bitcoin’s base network. The commentator described Liquid as a federated sidechain with an institutional structure and criticized Elements for accepting unbacked L-BTC while federation reserves released BTC. The writer characterized the incident as a sidechain solvency problem after a patch-and-deploy failure and called for greater accountability over the technical failure, while acknowledging that the return of 3,400 BTC reduced the potential impact on users. The commentator referred to the actors as former white hats who later became criminals, though this label is not a legal determination. Blockstream thanked developers and security teams that helped identify and patch weaknesses across related systems and assisted affected users during the incident.

    Conclusion

    Jiang Zhuoer exited Bitcoin at $77,226 after warning that U.S. inflation data could harden Fed policy expectations. Meanwhile, Blockstream rejected a ransom tied to the Liquid Network theft after recovering about 3,400 BTC, with roughly 598.5 BTC still outstanding as the company considers lawful recovery channels.

  • Liquid Network Recovers 3,400 BTC After Weekend Exploit — 600 BTC Still Unaccounted For

    Liquid Network Recovers 3,400 BTC After Weekend Exploit — 600 BTC Still Unaccounted For

    Liquid Network recovered 3,400 BTC (worth approximately $268 million) on Monday after a weekend exploit drained nearly 4,000 BTC from its reserves. However, about 600 BTC, representing 15% of the stolen amount, remains under the attacker’s control. L-BTC deposits and withdrawals remain suspended as operators work toward a safe restart.

    Elements Bug Allowed Unbacked L-BTC Creation

    Liquid disclosed the attack on September 6, confirming that stolen private keys were not the cause. SideSwap also stated its systems were not breached during the incident. Instead, the vulnerability originated from Elements, the Bitcoin Core fork that powers Liquid. A range-proof verification cache bug apparently allowed the creation of L-BTC without matching Bitcoin backing. The attacker then used those unbacked tokens to obtain real BTC through Liquid’s normal peg-out process. Liquid took its federation wallet and bridge nodes offline after detecting the abnormal withdrawals.

    Hacker Returns Most Funds After Patch

    The self-described white-hat hacker pledged to return most funds after Blockstream fixed the underlying software flaw. In messages to Blockstream, the party requested that patches be deployed across every node before returning Bitcoin. Blockstream later confirmed its bridge nodes had received the patch and could safely accept the funds. Onchain data then showed 3,400 BTC moving back to the Liquid Federation wallet. Approximately 598.5 BTC remains under the actor’s control, with no public agreement explaining whether those coins represent a bounty or a planned further return.

    Ledger Chief Technology Officer Charles Guillemet questioned the white-hat label after the partial repayment, stating that keeping roughly 600 BTC did not fit a genuine bug-bounty arrangement and described it as closer to extortion. The return removed most of the immediate reserve shortfall but did not restore normal Liquid operations. The network still needs to verify backing and complete software deployment before reopening its bridge.

    Liquid Keeps Peg Services Paused

    Liquid has not resumed normal operations while its operators prepare a safe restart. L-BTC deposits and withdrawals remain halted, affecting related services at centralized exchanges. Meanwhile, Bitcoin’s main network continues operating without disruption. The exploit also left other Liquid-issued assets untouched, including USDT, Depix, and real-world assets. Liquid wallets such as Aqua face disruption only across their Liquid functions; users can access unaffected Bitcoin network services while Liquid peg activity remains unavailable.

    Before reopening the bridge, operators need to restore one-to-one backing for legitimate L-BTC, distribute the patched Elements release across the network, and verify safe bridge operation. Liquid has not explained how it will cover any remaining gap in L-BTC backing, nor has it published a timeline for restoring the sidechain and its peg services.