Liquid Network Restores Full Bitcoin Backing Two Months After $320M Exploit

Blockstream CEO Adam Back said the sidechain's defenses have been hardened, and warned developers not to trust AI-suggested fixes blindly.

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Technical Hardening and Security Measures: Blockstream addressed the September 2026 exploit by implementing three primary defensive layers to secure the Liquid sidechain. These include migrating peg-out authorization keys to cold hardware wallets, disabling vulnerable proof-validation caches, and modifying consensus rules to ensure the system defaults to a 'fail-closed' state.
Risks of AI-Assisted Code Development: Blockstream CEO Adam Back issued a caution regarding the use of AI in security-critical software development. Following the network's compromise, he emphasized that developers should not trust AI-suggested fixes blindly, advocating for the 'don't trust, verify' principle in light of the evolving landscape of AI-assisted security analysis.