[Liquid Network: Negotiating with White Hat to Recover Remaining 598.5 BTC, Network Restoration Progressing Simultaneously] Odaily Planet Daily News – Liquid Network has released a security incident report. On September 6, a vulnerability in the open-source software Elements, related to the method of verifying proof of range in Liquid node caching, was exploited, resulting in the creation of approximately 4,000 LBTC without Bitcoin reserve backing. The exploiter subsequently exchanged these LBTC for approximately 4,000 BTC through SideSwap and Liquid's standard Peg-out mechanism. Before the incident, Liquid's reserves were around 4,205 BTC. After the related Peg-out and other withdrawals completed before the network halt, the reserves temporarily dropped to 197 BTC. The official statement clarified that this incident did not involve a breach of Functionary nodes or private keys, and other issued assets on Liquid, such as USDT, were not affected by the vulnerability. The exploiter identified themselves as a white-hat security researcher and returned 3,400 BTC to the Liquid Federation Peg wallet on September 7. Currently, approximately 598.5 BTC (about 15% of the involved funds) remain unrecovered. Blockstream is in communication with the individual to recover the remaining assets. The top priority now is to recover the remaining funds and restore Liquid Network's normal operations as quickly and safely as possible. A patch for the vulnerability has been developed and is undergoing multiple rounds of internal and external review. Blockstream is preparing to urgently release Elements v23.3.4, which is expected to be launched as soon as preparations are complete, with a target release within approximately 48 hours. After the software update is completed, Liquid Network Functionary operators will make further adjustments to restore the network's full functionality and implement the corrected network state, including rejecting previously invalid Peg-outs.