Block production has resumed. Peg-outs have not. And the shortfall of roughly 598 bitcoin is covered by a pledge rather than by reserves.
The Liquid Network's peg is still not restored, and describing the incident as resolved would be wrong in three separate respects.
The exploit occurred at 15:53:10 UTC on , through a range-proof caching bug in the Elements codebase. It drained the federation wallet from roughly 4,205 bitcoin to approximately 197 bitcoin.
On , about 3,400 bitcoin were returned by attackers describing themselves as white hats. Roughly 598.5 bitcoin, worth approximately $47 million to $50 million at recent prices, was retained. The attackers reportedly sought a 10% fee for returning the remainder. Blockstream publicly refused, characterizing the demand as a crime rather than responsible disclosure.
What "restored" actually means here
Block production resumed on at 10:00 UTC. That is the fact most often cited as evidence the network is back, and it is a partial one. Blocks resumed without user transactions, as a precautionary phase.
Peg-ins and peg-outs remain suspended. Before peg-outs can reopen, the federation must complete a step involving the republication of a reserve matching circulating L-BTC. That step has not been publicly confirmed as complete.
Blockstream co-founder Adam Back has stated the shortfall will be covered. That is a commitment conditioned on the reserve step, not a completed make-whole. No confirmation has surfaced since approximately that the shortfall has been funded or that peg-outs have reopened.
Why the distinction matters to holders
A holder of L-BTC currently holds a claim on a reserve that is short by roughly 598 bitcoin, on a network that will not process an exit. The recovery of 3,400 bitcoin materially reduced the size of the problem. It did not change its character, which is that the exit is closed and the backing is incomplete.
Sidechain designs like Liquid concentrate custody in a federation precisely to deliver faster settlement than the base layer. The tradeoff, which is normally theoretical, is that the federation is a single point of failure for both the reserve and the ability to leave. Both failed at once.
What would close it
Two disclosures end this: confirmation that the reserve republication is complete and peg-outs have reopened, and confirmation that the 598.5 bitcoin gap has been funded rather than promised. Neither has appeared. Until they do, the accurate description of the situation is an unresolved peg restoration entering its second week.