Emily Nicolle Calls Liquid Hacker Extortion, Not White Hat Activity

Bloomberg Opinion columnist Emily Nicolle said the hacker who stole $320 million in bitcoin from the Liquid network described themselves as a white hat hacker, but their actions were closer to a criminal trying to steal funds while minimizing legal risk. According to Foresight News, she said a genuine ethical hacker would disclose the flaw to the company and negotiate a reasonable bounty, while the Liquid attacker drained reserves, forced the network to pause for an extended period, and ultimately profited about $47 million. HackerOne employee Tony Lee said he had never seen a white hat hacker receive a bounty of more than $1 million in more than 20 years in the industry, and that large companies usually pay between $10,000 and $150,000 for bug bounties. Emily Nicolle said the incident was essentially extortion, adding that the hacker later demanded Blockstream hand over 10% of the stolen funds, or about $34 million, as a bounty, or investors would face a 15% loss. She said the demand amounted to holding the entire Liquid blockchain hostage for ransom and urged the crypto industry to establish its own bug bounty programs earlier to respond to rising hacker attacks. Emily Nicolle is a Bloomberg digital finance reporter and writes a column for Bloomberg Opinion, where she has long covered developments in the cryptocurrency industry.