LIQUID TURNS BITCOIN SWAPS BACK ON 44 DAYS AFTER THE EXPLOIT — ITS RESERVE HOLDS 3,632.23 BTC AGAINST 4,234.76 L-BTC — THE 602.53 BTC GAP IS STILL OPEN

On October 20, 2026, the Liquid Federation turned bitcoin swaps back on. Its blog post says “semi-automated BTC<>LBTC swaps are being enabled in coordination with participating swap providers, without protocol-imposed volume limits on this service.” The point, it says, is to “restore a practical means of converting LBTC to BTC, even while direct Federation peg-outs remain restricted.” Peg-outs have been shut for 44 days, since an attacker used a bug in the Elements software on September 6 to pull about 4,000 bitcoin out.

The reserve hasn’t changed. At bitcoin block 972,352, the federation held 3,632.23 BTC against 4,234.76 L-BTC in circulation. That’s 85.77% backing and a gap of 602.53 BTC, the same gap we read on October 11. Since then the reserve is down 6,823 sats, not a single L-BTC has been pegged in or out, and the attacker’s address still holds about 598.5 BTC without spending any of it.

On September 17, Liquid set its own bar: “peg-outs will resume only after full 1:1 BTC backing for LBTC has been confirmed.” Swaps aren’t peg-outs, so the federation can say the bar still stands. But for a holder, a swap is the same exit by another door: a provider hands over bitcoin and takes the L-BTC. The post calls “reestablishing the network's full 1:1 bitcoin backing” the final phase. It doesn’t say at what rate providers will swap, or who ends up holding L-BTC that’s still short.

The federation also promises “transparent monitoring of the network's bitcoin reserves through block explorers” in a later phase. You don’t have to wait for it. The reserve page on liquid.network and the attacker’s address on mempool.space are public now, and on day 44 they say what they said on day 35. At the time of this writing, bitcoin was $82,838.