Liquid Network Hackers Use Bitcoin’s OP_RETURN to Call for 10% Bounty, Sparking Public Debate

Self‑described “white‑hat” actors who penetrated the Liquid Network—a Bitcoin sidechain that enables faster, confidential transactions—have taken to the public eye, demanding a 10% reward for their work. The claim was broadcast not through a forum or social media platform, but via a series of OP_RETURN transactions embedded in the Bitcoin blockchain itself, a method that ensures the message is immutable and globally visible.

The hackers announced that they had successfully exploited a vulnerability in the network’s bridge mechanism, which links the sidechain to the main Bitcoin ledger. While the exact technical details remain undisclosed, the perpetrators argue that their disclosure helped prevent further exploitation and that a bounty is customary for responsible disclosures in the cryptocurrency space.

Liquid Network, operated by Blockstream, has positioned itself as a solution for traders and institutions seeking quicker settlement and enhanced privacy. The platform’s reliance on a federated peg and a set of functionaries to manage the two‑way transfer of assets makes it a high‑value target for security researchers and malicious actors alike. Historically, the network has offered bug‑bounty programs, but the public demand for a 10% cut—calculated on the value of the assets at risk—has raised questions about the appropriate compensation for such findings.

Using OP_RETURN to communicate the bounty demand is noteworthy because the data field can store up to 80 bytes of arbitrary information on the Bitcoin blockchain. By embedding their message there, the hackers guarantee that the request cannot be altered or censored, leveraging Bitcoin’s consensus to amplify their leverage. This tactic also draws attention to the broader issue of how blockchain transparency can be employed for advocacy or extortion, a topic that regulators and developers are beginning to grapple with.

The public reaction has been mixed. Some members of the crypto community view the demand as a legitimate claim for work that may have averted larger losses, while others warn that such public bargaining could set a precedent that encourages opportunistic disclosures. Blockstream has not yet issued an official statement, but industry observers note that the company’s response will likely shape future bounty policies and the handling of security research on layered blockchain architectures.

As the conversation unfolds, the incident underscores the delicate balance between incentivizing security research and preventing abuse. Whether the 10% bounty will be paid, negotiated, or rejected remains to be seen, but the episode has already sparked a broader dialogue about the norms governing white‑hat activities in the rapidly evolving world of decentralized finance.