Bitcoin News
By Sydney TheCMO
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Encrypted Messages in Bitcoin Blocks. It all started with messages exchanged directly through Bitcoin blocks — not by email, not by…
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A Bug in Elements Behind the Withdrawal. Where did these 4,000 BTC come from initially? SideSwap mentioned a bug issue in Elements as the…
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Four thousand bitcoins vanished. Then 3,400 returned. And 598.5 BTC remain with the White Hats, with no visible final agreement.
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The return transaction was confirmed at 16:09 UTC on September 7. Exactly 3,400 BTC landed on the Liquid peg script address, while 598.
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It all started with messages exchanged directly through Bitcoin blocks — not by email, not by Telegram, but through the blockchain itself.
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In block 965869, the White Hats posted a message asking if returning "most" of the funds to the federation address was acceptable. The wording is vague, likely intentionally.
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And the reactions on social media were mixed, to say the least.
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Blockstream continued to send encrypted messages after the partial return. The exact content of these exchanges remains unknown — no public statement, nothing.
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Related reading: Blockstream's Liquid Network Suspended After 4,000 Bitcoin Bug Drains $320 Million
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Where did these 4,000 BTC come from initially? SideSwap mentioned a bug issue in Elements as the origin of the funds withdrawn from the federated wallet.
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The White Hats insisted on fixing this bug before returning anything. Logical, in a way — if the flaw remains open, returning the funds is pointless, someone else could do it…
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But 598.5 BTC kept is a sum that sparks debate. In the world of classic bug bounties, 15% of such a high amount is outside the usual norms.
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Independent researchers closely followed the matter. The GitHub of Sjors and the research by Alex Thorn of Galaxy Research documented the transactions and exchanged messages,…
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The entire sequence — withdrawal of funds, on-chain messages, patching of nodes, partial return, failed negotiations — unfolded in a few hours on September 7. Quickly, then.
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See also: 4,000 Bitcoin Disappear from Liquid Network as Mysterious Hackers Claim Attack
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