According to CryptoBriefing, the Liquid Network has resumed operations, but the peg-out process for converting L-BTC back to Bitcoin remains suspended, with a reserve shortfall of approximately 603 BTC. Liquid stated that redemptions will only resume once all circulating L-BTC is fully covered and a security review is completed. The incident began on September 6, 2026, when a vulnerability in the Elements software allowed unauthorized creation and redemption of L-BTC, resulting in approximately 3,996 to 4,000 BTC being withdrawn from the federation's reserves, valued at around $320 million at the time. Before the incident, the reserves held about 4,205 BTC, which dropped to a low of 197 BTC. A self-proclaimed white-hat actor returned approximately 3,400 BTC on September 7, but 598 to 603 BTC remain unreturned. The federation members' signing keys and SideSwap's Peg-out Authorization Key were not compromised. The network resumed block production and transactions on September 10, but as of October 11, peg-out remains suspended. Restarting peg-out requires upgrading Elements, completing a security audit, and transitioning key management to cold storage. Blockstream CEO Adam Back stated that the 1:1 peg will eventually be restored, but no specific timeline has been provided. USDT and tokenized physical assets were not affected. https://(wublock123.com)/news/liquid-network-resumes-operations-redemptions-paused-l-btc-btc-gap-603-69879