‘White hat’ hackers take $47 million bounty after $320 million crypto theft

‘White hat’ hackers exploited a vulnerability in the Liquid Network trading platform, stealing $320 million in Bitcoin. After a lengthy negotiation, the hackers received a $47 million reward for identifying the flaw and subsequently returned $266.5 million of the stolen funds, while Blockstream deployed updated software to address the issue. The incident began with a public, hours-long negotiation between the hackers and Liquid Network, where the hackers initially claimed to be ‘whitehats’ and demanded Blockstream fix a vulnerability before returning the stolen funds. The hackers initially wrote, “we are whitehats, contact us on chain” in a message attached to the transaction bridging the $320 million out of Liquid’s account. The hackers added that the chain was under risk at latest commit and requested Blockstream to patch every node. Following the negotiation, the hackers sent $266.5 million worth of bitcoin back to Liquid on Monday morning. Blockstream confirmed the negotiations and said “updated software” was deployed as they ramped up to restart the system. The incident follows a pair of April incidents where alleged North Korean hackers stole $290 million and $280 million respectively from the Kelp and Drift platforms. Blockstream launched Liquid in 2018 as a way to enable faster bitcoin transactions, claiming to “improve a broken financial system” and “extend Bitcoin’s use cases into the realm of new capital markets.”