Liquid restores BTC backing as Adam Back warns developers not to trust AI-suggested fixes

Following a September exploit that drained about $320 million in BTC and left a gap in its reserve, the Liquid Federation has now announced that it has restored full 1:1 Bitcoin for LBTC. The missing coins were reportedly supplied by Blockstream. LBTC is the token that represents Bitcoin on Blockstream’s sidechain. Blockstream filled the reserve gap Liquid Federation shared the update on X on Tuesday, November 3, writing that it “is pleased to announce that the network’s bitcoin reserves have been fully restored, reestablishing 1:1 BTC backing for all LBTC.” Blockstream CEO Adam Back shared a screenshot of a dashboard showing Liquid Network’s assets matching liabilities at 100%. The screenshot also showed the reserve deficit is now 0.00 BTC.

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