Liquid Network has resumed block production after deploying emergency software updates, though transactions and peg operations remain suspended as recovery work continues.
In a Thursday post on X, Liquid said block production had restarted "without transactions" as a precaution while the network is monitored to "confirm full stabilization." It added that required updates for its functionary and bridge nodes had been deployed, and that functionary nodes are now signing and validating blocks as intended.
Peg operations remain paused, including PAK-authorized peg-outs, while the network works to restore its BTC/L-BTC reserve.
Emergency Elements update deployed
A day earlier, Liquid released an emergency update to Elements, the software underlying the network, to address the proof-verification cache vulnerability linked to the incident. The update, Elements v23.3.4, hardened cache keys used for range proofs as part of the recovery plan.
The source for the update details was Liquid Network.
$270 million in Bitcoin was returned
Liquid halted operations on Sept. 6 after actors claiming to be white-hat hackers withdrew about 4,000 Bitcoin from the network’s federation wallet. The amount was worth roughly $320 million at the time.
The withdrawal accounted for about 95% of the wallet’s roughly 4,200 BTC balance. It involved L-BTC tied to a bug in Elements, the open-source software that powers Liquid.
The actors later returned 3,400 BTC, worth about $270 million at the time, after Blockstream confirmed that the affected bridge nodes had been patched. As of Sept. 7, about 598 BTC remained outstanding, worth roughly $46 million at current prices.