Liquid Network reserve gap narrows to 600 BTC after test transfer

ChainCatcher reports that the reserve gap on the Liquid Network has fallen to roughly 600 BTC after a test transfer. Samson Mow, a Liquid Federation member, said the remaining funds are expected to be secured in the coming days. The recovery plan requires full reserve backing before direct redemptions can be reinstated. The network previously suffered a security incident in which attackers exploited a rangeproof validation cache vulnerability in Elements to mint approximately 4,000 LBTC without adequate Bitcoin backing and withdrew around 4,000 BTC via the redemption channel of Federation member SideSwap. The attackers later returned 3,400 BTC, with about 602 BTC still under recovery. After the incident, Blockstream suspended Liquid bridge nodes, notified exchanges to pause LBTC deposits and withdrawals, deployed an emergency patch, and released Elements v23.3.4 to fix the vulnerability. Transactions on the Liquid Network have resumed, but direct redemptions remain suspended. Current reserve coverage stands at about 85.8%.