Liquid Network resumed block production on 10 September after a hack drained roughly $320 million from its federation wallet, with functionary nodes signing and validating blocks. Transactions were initially disabled during monitoring but later resumed, allowing users to transact with assets already on Liquid. Peg-outs, which move LBTC back to the Bitcoin network in exchange for BTC, remain suspended as Blockstream checks the network’s internal state and confirms that BTC/LBTC reserves have been restored and verified. The recovery follows the Emergency Elements v23.3.4 release, which addressed the underlying proof-verification cache vulnerability by strengthening cache keys used for range-proof verification. Blockstream said it will not pay a ransom and will work with law enforcement, exchanges, blockchain investigators and security experts to trace and recover the stolen BTC. White hat hackers have returned 3,400 BTC worth about $268 million, representing roughly 85% of the Bitcoin withdrawn, while around 598.5 BTC remains in a separate wallet as an unofficial bounty.