Blockstream says it has completed a fix connected to an earlier Liquid network withdrawal incident and has notified the white-hat hacker holding 3,998.5 BTC that the funds can now be returned safely. The recovery would resolve one of the largest outstanding crypto security incidents described in the latest market update, although Blockstream did not provide a timetable for the return.
The party controlling the BTC had asked for all relevant nodes to be patched before releasing the assets, according to the disclosure. Blockstream’s announcement indicates that condition has been met, placing the next step with the white-hat hacker rather than with the network operator.
The supplied update described the original breach as an attack on a shared digital-wallet system in which roughly $320 million was taken. It also said that 3,400 tokens, estimated as about 85% of the stolen value, had already been returned. Those figures were presented alongside Blockstream’s separate statement that 3,998.5 BTC remained under the hacker’s control.
Liquid recovery depends on return of remaining BTC
Liquid is Blockstream’s Bitcoin sidechain, designed to support faster settlement and the issuance and transfer of tokenized assets. Its withdrawal mechanism is therefore a critical piece of infrastructure: users need to be able to move value between the sidechain and the Bitcoin network with confidence that the process cannot be disrupted or exploited.
A completed patch would reduce the risk that the underlying weakness could be used again during a recovery process. Yet the incident will not be fully closed until the BTC is transferred back and the parties confirm the handover.
The episode also illustrates the unusual role white-hat hackers can occupy after a major exploit. Rather than immediately moving stolen assets through mixers or exchanges, some attackers retain the funds while demanding technical fixes, public disclosures, or negotiated terms. That approach can lead to recovery, but it also leaves users and affected platforms exposed to uncertainty until the assets are returned.
Bitcoin and major tokens post modest declines
The Liquid update arrived during a mixed 24-hour trading period for major cryptocurrencies. In the pricing snapshot provided, Bitcoin fell 1.11%, while Ethereum lost 0.89%. Solana declined 1.98%, Chainlink dropped 2.84%, XRP slipped 1.39%, and BNB fell 1.57%.
Bitcoin was described as trading near $79,100 after falling below $80,000. The supplied update linked the move to market disappointment over the August U.S. jobs report and reduced expectations for lower borrowing costs. No independent pricing or macroeconomic source was included with those claims.
Sui moved against the broader large-cap weakness, gaining 1.93%, while Dogecoin added 0.44%. Tokenized gold asset XAUT rose 0.28%. ZEC appeared in the large-cap snapshot as down 4.70%, although a separate 24-hour leaders list showed it up 10.72%, suggesting the figures reflected different observation times or market data snapshots.
Among the larger daily gainers, Raydium’s RAY rose 35.96%, followed by DOOD at 27.42%, Metis at 20.63%, and Jupiter’s JUP at 19.00%. CATI, TIA, SWFTC, WOO, and ZAMA also recorded double-digit gains in the supplied list.
Privacy-token data points to concentrated sector strength
Glassnode data cited in the update showed privacy-focused assets gaining 213% from October 6, 2025, while Bitcoin remained 36% below its October 2025 peak. Over the past 30 days, the privacy sector was reported to have risen 90%, the strongest performance among the top 10 sectors tracked in the dataset.
The combined market capitalization of privacy assets among the top 200 cryptocurrencies reached about $33.6 billion, up from $7.1 billion a year earlier, according to Glassnode. Nearly half of that increase occurred during the preceding 30 days.
Zcash was the standout example. Glassnode’s figures showed ZEC moving from 82nd to seventh in market-cap ranking over the past year, with its price up 2,496%. Monero’s XMR doubled over the same period, according to the same dataset.
Such gains point to a sharp concentration of demand in a segment built around transaction privacy, rather than a uniform advance across the crypto market. Privacy tokens can also face distinct regulatory and listing risks because some platforms limit support for assets designed to obscure transaction details.
Leverage and regulation remain central market risks
Derivatives data from Hyperbot showed a trader identified as Loracle increasing a three-times-leveraged short position in PONS to 25,747,236 tokens, valued at approximately $21.078 million. A short position seeks to profit if the underlying token declines; leverage magnifies both potential gains and losses.
In Washington, U.S. Senator Cynthia Lummis said failure to pass the CLARITY Act during the current Congress could delay another realistic opening for market-structure legislation until 2030. Lummis also cited possible consequences for jobs, capital flows, and tax revenue if the bill stalls.
The supplied update said a Senate vote was planned for September 15 and claimed that the measure had 51 of the 60 votes needed to advance. Lummis’s warning places the legislation alongside the Liquid recovery as a near-term issue with practical implications: one concerns the security of a major Bitcoin-linked network, while the other concerns the rules under which U.S. crypto businesses could operate.
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