JAN3 CEO Samson Mow says the Liquid Network's remaining shortfall of 600 BTC will be fully covered in the coming days, according to a report by Crypto Briefing. The sidechain's Bitcoin reserves are nearly whole again after a September exploit.
Where the numbers stand
The latest movement came on October 27, 2026, when a test transaction of 2.53048101 BTC landed in the Liquid federation wallet. Test transfers are how custodians confirm the plumbing works before sending larger amounts.
After that deposit, the federation wallet holds roughly 3,649 BTC. Circulating against it are 4,249 L-BTC, the token meant to represent Bitcoin on Liquid. That works out to about 85.88% coverage, leaving a gap of approximately 600 BTC.
L-BTC is designed to function as a receipt: every token on Liquid should correspond to one real Bitcoin locked up by the federation, the group of members that manages the reserve.
How Liquid ended up short
The trouble started on September 6, 2026, when an attacker exploited a flaw in Elements, the software Liquid runs on. The bug allowed the creation of around 4,000 L-BTC with nothing backing them.
The damage to reserves was severe. Holdings fell from roughly 4,205 BTC to just 197 BTC. After negotiations, the attackers returned 3,400 BTC, recovering the bulk of what had been lost.
That still left a hole. Blockstream has pledged to cover it rather than push the losses onto users, saying covering the shortfall was a matter of “when,” not “if.” Mow's comments now put a rough timeline on the “when.”
An external security audit was completed by October 20, 2026, and certain recovery measures were put in place after that review.
Withdrawals are only partly back
Users are not fully free to leave yet. Moving Bitcoin off Liquid and back to the main Bitcoin chain is known as a peg-out. Peg-outs have only partially resumed, and only 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. Filling the 600 BTC gap is the precondition for turning the main exit back on.
What this means for Liquid and its users
For L-BTC holders, the most immediate stake is redemption. Once the federation reaches full backing, direct peg-outs should be able to resume, removing the dependence on third-party swaps.
Blockstream's decision to absorb the remaining loss matters here. Many hacked protocols have socialized losses across users, effectively giving everyone a haircut.
