Liquid Network restores full Bitcoin backing after exploit
BROBROK News · Based on reporting by Decrypt ·
The Liquid Federation said its Bitcoin reserves have been fully restored, bringing LBTC back to full 1:1 backing. The update comes two months after a September exploit that drained most of the federation wallet and left part of the funds unrecovered.
Key points
- Liquid says all LBTC is again backed 1:1 by BTC.
- BTC-LBTC swaps had already been restored through providers weeks earlier.
- Adam Back said key defenses were hardened, audited, and set to fail closed.
- The federation did not disclose how the shortfall was covered.
- Back warned developers to be skeptical of AI-suggested fixes.
Why it matters
Liquid is a Bitcoin sidechain built around custodial reserves, so reserve integrity is central to user trust. The restoration helps normalize operations, but the exploit and the unanswered funding gap show that security risk remains a key issue.
Original headline: “Liquid Network Restores Full Bitcoin Backing Two Months After $320M Exploit”
Summary and analysis written by BROBROK News from the original report. Read the full story on the source website. Not investment advice.