Blockstream has drawn a hard line against the party holding the Bitcoin taken from Liquid Network and said it will not pay a ransom for the return of the stolen funds.
In its latest statement, the blockchain technology company led by Adam Back rejected the claim that the incident was considered a responsible disclosure, while arguing that taking assets without permission and then withholding them is theft and not white hat activity.
“Transactions don’t disappear”
Block flow said it made a good faith commitment to recover stolen user funds, but added that these efforts should not be taken as acceptance of the hackers’ actions or their demands. While rejecting the bounty request, the company said it would not set a precedent where open source developers would be forced to pay a ransom for software designed for the Bitcoin community.
“Bitcoin is hard money and cannot be minted without fees; Bitcoin does not cut hair for users to pay a ransom.”
Blockstream said it was still possible for those holding the stolen BTC to return it and resolve the situation responsibly. However, if funds are not returned, the Company will pursue all available legal avenues, including working with law enforcement, exchanges, service providers and forensic specialists to trace assets and identify those responsible. He also pointed out that Bitcoin transactions remain visible by design, meaning that the funds and evidence associated with their movement do not simply disappear.
No easy solution
Hackers previously called Blockstream “delusional, greedy and arrogant” over its handling of security. Samson Mow later warned that they may have underestimated the consequences of their actions. The former Blockstream CSO said the company’s willingness to communicate with them via PGP was already a courtesy and questioned whether publicly admitting to taking the assets and then demanding a premium was a wise move. He also said the group left more clues behind than he thought.
The incident began on September 6, when around 4,000 BTC was withdrawn from Liquid’s Federation wallet. The suspected hackers then returned 3,400 units, while approximately 598 remained in their possession.
Meanwhile, Liquid has now entered another recovery phase. Block production and transactions have resumed, although pegs remain disabled. The network said internal and external teams were continuing testing, AI-assisted code analysis and monitoring, while Liquid node operators had been asked to update to Elements v23.3.4.
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