12 October 2026
Liquid Network Faces Ongoing Bitcoin Redemption Freeze Amid 86% Backing Crisis
The Liquid Network is currently grappling with significant challenges as its peg-out operations have been frozen for over 35 days. This suspension follows a serious exploit that drained nearly 4,000 BTC from the protocol, leaving users frustrated and anxious for updates.
As of October 11, 2026, approximately 3,400 BTC has been recovered from the attackers, but 598.5 BTC, valued at around $49.69 million, remains in their possession. The attackers have demanded a 10% bounty from Blockstream, the network's creator, which has been firmly rejected.
Users of the Liquid Network have expressed their growing dissatisfaction with the lack of communication and the ongoing external security audit of the Elements software. Many are concerned about the 14% of their assets that are currently unbacked as the network operates at only 86% backing.
Despite the uncertainty, some users have begun exploring alternative methods to access their funds, with reports of individuals successfully migrating their assets through third-party applications. However, this has come at a cost, with users noting significant fees and delays.
As the Liquid Federation works to restore peg-out operations, the timeline for resolution remains unclear, leaving many in the community anxious for a return to normalcy.
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