Liquid Network recovered 3,400 BTC after attackers exploited an Elements range-proof validation cache flaw to create unbacked L-BTC and redeem it through SideSwap's authorized peg-out process. The exploit drained roughly 4,000 BTC, or about 95% of Liquid's reserve, leaving about 197 BTC before the return; approximately 598.5 BTC, valued around $47 million, remains in addresses controlled by the attackers. Liquid's latest security report says Blockstream is still seeking those funds and has not recognized them as a bug bounty. No private keys or SideSwap's Peg-out Authorization Key were compromised. Liquid remains paused as Blockstream reviews Elements 23.3.4 and coordinates a restart intended to reject invalid withdrawals and restore 1:1 Bitcoin backing.