Liquid Network resumed block production and reopened SideSwap markets after a Sept. 6 exploit enabled the creation of about 4,000 unbacked L-BTC and the withdrawal of roughly 3,996 BTC. Attackers returned 3,400 BTC after Blockstream patched affected nodes but retained 598.5 BTC and sought a 10% bounty from Blockstream's funds. Blockstream rejected the demand on Sept. 11, called for the bitcoin's return and said it would pursue recovery through law enforcement, exchanges, service providers and forensic specialists. Liquid's reserve held 3,597 BTC against 4,205 L-BTC in circulation as of Sept. 10, leaving about 85% coverage. Peg-ins and peg-outs remain disabled while the federation reviews security and develops a new architecture, though Blockstream Chief Executive Adam Back said L-BTC will ultimately be backed one-for-one by BTC.