# Liquid’s bitcoin IOUs are fully backed again after a $320 million exploit

- URL: https://talkfuse.com/story/liquids-bitcoin-ious-are-fully-backed-again-after-a-320-million-exploit/
- Published: 2026-11-03T11:12:12+00:00
- Updated: 2026-11-03T23:36:54+00:00
- Original publisher: CoinDesk
- Original article: https://www.coindesk.com/markets/2026/11/03/liquid-s-bitcoin-ious-are-fully-backed-again-after-a-usd320-million-exploit
- Topics: Business, Crypto, Software, Technology

## Key points

- Liquid says every LBTC is backed by bitcoin again.
- An attacker returned 3,400 BTC; later deposits filled the remaining gap.
- Direct Federation withdrawals remain restricted.

## Summary

Liquid Network says its bitcoin reserves once again fully back every LBTC token in circulation, nearly two months after an exploit exposed a large shortfall. On 6 September, a flaw in the Elements software allowed an attacker to create about 4,000 LBTC without depositing the corresponding bitcoin and redeem the tokens for real BTC. The reserve fell from roughly 4,205 BTC to 197 BTC. The attacker returned 3,400 BTC the next day, leaving a gap of about 600 BTC. Deposits in late October and on 2 November closed that gap; SideSwap reported 4,270.54 BTC in reserve against 4,270.54 LBTC in circulation on the morning of 3 November.

The Federation did not identify who supplied the replacement bitcoin in its announcement, although board member Samson Mow said Blockstream provided it. Restored backing does not mean all withdrawal routes are operating normally. Users can exchange BTC and LBTC through participating providers, but SideSwap says the Federation’s own direct withdrawals remain restricted, so its payouts come from a wallet replenished manually and may face delays. The Federation says it will provide details of planned governance, security and operational changes in the coming weeks.

## Coverage

- [CoinDesk: Liquid’s bitcoin IOUs are fully backed again after a $320 million exploit](https://www.coindesk.com/markets/2026/11/03/liquid-s-bitcoin-ious-are-fully-backed-again-after-a-usd320-million-exploit)
- [Blockstream: Liquid Network Security Incident Assessment](https://blog.blockstream.com/liquid-network-security-incident-assessment/)
- [SideSwap: The Liquid peg is back to one to one](https://testnet.sideswap.io/news/the-liquid-peg-is-back-to-one-to-one/)

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.