Key Takeaways
- Blockstream still has L-BTC peg-outs paused more than 2 weeks after the Sept. 6 Liquid hack.
- Bull Bitcoin says L-BTC-to-BTC swaps could return within 30 days, but calls that an educated guess.
- Liquid attackers still hold 598.50 BTC worth over $51 million after returning roughly 3,400 BTC.
Liquid’s Peg-Out Problem Drags On
L-BTC holders may have to wait a lot longer until they can swap their tokens back into bitcoin (BTC), enabled by a process called a “peg-out.” Bull Bitcoin took to X on Tuesday and told customers that the service could resume within 30 days. “The reality is that the Liquid Network’s situation is completely outside of BULL’s control: We have to wait for the Federation to resume peg-outs,” the official X account wrote.
Bitcoin.com News reported six days ago that Blockstream’s Liquid Network was still having issues in terms of allowing L-BTC to BTC swaps. After so-called white hat hackers stole nearly 4,000 BTC on Sept. 6, they sent back around 3,400 BTC to Blockstream following back-and-forth onchain discussions. The attackers kept 598.50 BTC, and Blockstream is now demanding that they return the funds immediately.
It appears that talks with the attackers have not been fruitful since then. On Sept. 17, Liquid Network’s official X account gave an update on the situation.
“Since resuming on September 10, block production and network transactions, including LBTC transfers, have operated normally,” the account disclosed. “Peg-out operations remain paused while work continues with Federation members and partners toward their safe restoration.”
Bull Bitcoin’s 30-Day Estimate Draws Fire
The layer two (L2) Liquid Network account has not published a status update since then. Bull Bitcoin noted on X that because it relies on the L-BTC peg-out mechanism to balance inventories, it has also chosen to keep inbound Lightning Network payments disabled for now. Bull said it made this decision to protect users from taking the “risk of holding L-BTC without compensation or a guarantee that they can exit back to BTC.”
The exchange added:
“Based on the information we have, our expectation is that Liquid swap and exchange services allowing users to convert their L-BTC to BTC could resume within 30 days. This is an educated guess, not a guarantee.”
Many X users replying to Bull Bitcoin’s thread were not pleased. “That takes way too long and would destroy the Liquid Network’s reputation. Peg-outs need to be enabled NOW. Don’t blame Blockstream … you’re part of the federation … get it sorted out,” one individual wrote. Others were not so nice. “Liquid is f***ed. Forever. There are no bailouts, bailins, or printing presses coming to save you,” another person replied in Bull Bitcoin’s post.
