The Liquid Network, a Bitcoin sidechain operated by a federation of 81 members, confirmed on November 2 that its bitcoin reserves are once again fully backed, restoring the 1:1 peg of its native LBTC token after a September hack left a 600‑BTC shortfall. According to Bitcoin.com News, the network now holds 4,270.54 LBTC—equivalent to the same amount of bitcoin—effectively closing a gap valued at roughly $46 million.

BTC / USD
Source: CoinGecko. Prices are indicative.

Background of the September Attack

On September 6, an attacker exploited a vulnerability in the Elements software that underpins Liquid, creating about 4,000 LBTC without corresponding bitcoin. The attacker redeemed the counterfeit tokens for real BTC, stealing nearly 4,000 BTC. The following day, 3,400 BTC were returned, leaving a 600‑BTC bounty unclaimed. The stolen funds have remained unmoved since the incident.

Restoration of Reserves

Liquid’s team announced that an additional 250 BTC was added to the reserve, eliminating the remaining deficit. Samson Mow, former chief security officer at Blockstream, posted on X that the shortfall was closed, a claim later verified by the network’s explorer data. The source did not disclose who contributed the final funds, nor the exact timing of the replenishment.

Governance and Safeguard Plans

In response to the breach, Liquid Network said it will modernize its governance structure, introducing clearer responsibilities and oversight. The network also plans to implement new technical and operational safeguards to protect participants, with further details slated for release in the coming weeks, according to the statement released by the federation.

What to Watch Next

Observers will be looking for the forthcoming governance proposal and any post‑mortem report that details the root cause of the Elements bug. Additional scrutiny may focus on how the federation’s 81 members, including Blockstream, Hodl Hodl, Specter, Coinshares, Komainu, Xapo, Bull Bitcoin and Ledger, coordinate future security measures. The market’s reaction to the restored peg and any subsequent changes to swap provider fees could also influence LBTC’s liquidity on the network.