Summary
The Liquid Network is producing blocks again, and SideSwap's markets are open. Swaps and every market on SideSwap work as they did before 6 September. New peg-ins and peg-outs remain closed at SideSwap while the Liquid Federation completes its security review of the peg.
This note sets out what has reopened, what has not, and the position on the backing of L-BTC as it stands in public figures. We promised this note in our statement of 9 September. It does not repeat that statement, which remains our account of what happened and of what we take responsibility for.
What is open
Swaps and all SideSwap markets are open from the first block. Wallets work as before. Assets in SideSwap wallets are controlled by their owners' own keys and were never involved in the incident; balances are unchanged in number.
DePix deposits and withdrawals are working normally.
What is closed
Peg-in and peg-out are closed. The Federation has restarted the network with the peg switched off while it completes its security review. Our own peg service stays offline until the Federation's new security architecture is in place, and we will say plainly what has changed before we reopen it, as we committed on 9 September.
Some other venues may choose to stay closed until the backing question is settled. That is their decision to make and we do not speak for them.
The backing of L-BTC
The figures below are public and on chain. We quote them from liquid.network as of 10 September 2026 so that anyone can check them.
There is 4,205 L-BTC in circulation. The Federation's reserve holds 3,597 BTC. The reserve therefore covers about 85 percent of the L-BTC in circulation. Of the roughly 3,996 BTC pegged out on 6 September, 3,400 BTC was returned to the Federation on 7 September and is included in that reserve figure. The remainder is the subject of efforts led by others, on which we will not comment.
We do not know how this resolves. The outstanding bitcoin may be returned, and the reserve made whole. The Federation or its members may act to restore full backing. Or L-BTC may trade below bitcoin for some time. We have no insight into the discussions under way, we are not part of them, and we will not speculate on their outcome.
What our markets will show
SideSwap does not set the price of L-BTC and does not peg it to anything. Our markets are open order books: the price is whatever buyers and sellers agree, and it will be visible to everyone. In the first hours after reopening we expect that price to move a great deal and the books to be thin. Anyone who is not in a hurry is better served by a limit order than by taking the first price on screen.
We are opening our markets because a closed market does not make uncertainty go away, it only hides it. An open, transparent price is the fairest way for the community to work out what L-BTC is worth while the backing question is unresolved, and it is what the other assets on Liquid need in order to keep functioning. Whatever the position turns out to be, it will be visible and the same for everyone who trades.
Other assets on Liquid, including USDt and DePix, are issued by their own issuers and are backed by those issuers independently of L-BTC. What has changed is the backing of L-BTC, not of the other assets. Network fees continue to be paid in L-BTC.
Practical guidance
A transaction sent after the network paused on 6 September may confirm as blocks resume, or may need to be sent again. Check your wallet once blocks are flowing; if a transaction still shows as unconfirmed after a few hours, write to [email protected] with the transaction id.
Peg-ins and peg-outs that were in progress with SideSwap when the network paused will be completed by us now that blocks are flowing. There is nothing you need to do. If yours still has not completed, email [email protected] with the transaction id. Peg-outs already paid on Bitcoin before the pause are complete.
Nothing else is required of users. Wallets, keys and balances are unaffected.
What comes next
Blockstream and the Liquid Federation are leading the network-level work, including the security review and the future of the peg. We will publish what has changed in our own peg service before we reopen it, and we will post updates on x.com/side_swap and t.me/SideSwap_io as things move. We will not comment on the recovery efforts or on who was behind the incident.
About SideSwap
SideSwap is a non custodial exchange and wallet built on the Liquid Network, focused on atomic swaps, self custody, and open blockchain based capital markets rooted in Bitcoin.
Inquiries:
[email protected]