JAN3 CEO Samson Mow says the remaining 600 BTC shortfall on the Liquid Network will be covered in the coming days. Blockstream has pledged to make users whole after a September exploit, while direct peg-outs stay paused until full backing returns.
JAN3 CEO Samson Mow says Liquid's remaining shortfall of 600 BTC will be fully covered in the coming days. The gap traces to an exploit of Elements, the software behind the Liquid sidechain.
Where the reserve stands
A test transaction of 2.53048101 BTC landed in the Liquid federation wallet on October 27, 2026. After that deposit, the wallet holds roughly 3,649 BTC against 4,249 L-BTC in circulation.
That works out to about 85.88% coverage, leaving a gap of approximately 600 BTC. L-BTC is meant to represent Bitcoin on Liquid, with each token corresponding to one real Bitcoin locked up by the federation.
How the shortfall opened
On September 6, 2026, an attacker exploited a flaw in Elements. The bug allowed the creation of around 4,000 L-BTC with nothing backing them.
Reserves fell from roughly 4,205 BTC to just 197 BTC. After negotiations, the attackers returned 3,400 BTC.
Blockstream has pledged to cover the remaining hole rather than push the losses onto users. An external security audit was completed by October 20, 2026, and certain recovery measures were put in place after that review.
Direct withdrawals remain paused
Peg-outs, which move Bitcoin off Liquid and back to the main Bitcoin chain, have only partially resumed through third-party swap services. Direct peg-outs through the federation itself remain paused.
Those direct withdrawals will stay restricted until full 1:1 backing is restored. Once the federation reaches full backing, direct peg-outs should be able to resume.
Source: Crypto Briefing
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