Liquid's bitcoin IOUs fully backed after $320M exploit

The Liquid Network — the Bitcoin sidechain run by a federation of firms led by Blockstream — says every LBTC token is backed by real bitcoin again, after a final 250 BTC transfer closed the hole left by September's exploit. A software bug on Sept. 6 let an attacker mint about 4,000 unbacked LBTC and redeem them for real bitcoin, cutting reserves from roughly 4,205 BTC to 197 BTC (~$320 million). The attacker, who claimed white-hat status, returned 3,400 BTC, leaving about 600 BTC (~$40 million) missing — and the federation has not said who supplied the coins that filled the gap.

• Users can swap BTC and LBTC at 1:1 through providers like SideSwap since late October; direct federation withdrawals remain under "enhanced operational controls."
• The federation promised details on governance changes "in the coming weeks."