Liquid Network has restarted block production after a major Bitcoin withdrawal from its federation wallet, but it is still operating in a limited recovery mode. According to a Thursday update posted on X by Liquid_BTC, the network resumed producing blocks “without transactions” while teams monitor the system for “full stabilization.”

Peg operations—including peg-outs authorized via PAK—remain suspended as Liquid works to restore its BTC/L-BTC reserve. The restart comes after emergency software changes to Elements, the open-source platform that underpins Liquid.

Key takeaways

• Liquid resumed block production, but transaction processing and peg-outs are still paused during recovery.
• Liquid says functionary and bridge node updates have been deployed, with functionary nodes now signing and validating blocks.
• Peg operations remain halted until the network can rebuild its BTC/L-BTC reserve.
• The incident was tied to a vulnerability involving proof verification cache handling in Elements, addressed by an emergency update.

Block production returns—transactions stay paused

Liquid’s latest status update emphasizes caution. In the X post, Liquid states that block production has resumed as a precautionary measure, but “without transactions.” The network is being monitored to confirm that it has fully stabilized before broader functionality is restored.

Alongside the operational restart, Liquid says required upgrades to critical infrastructure nodes have already been pushed. Functionary nodes are now signing and validating blocks “as intended,” which suggests that core consensus duties are functioning again—even though user-facing activity is still constrained.

For participants, this distinction matters. Restarting block production can help ensure the system remains synchronized and responsive, but pausing transactions and peg operations reduces the risk of further complications while the reserve and related state are repaired.

Elements emergency update addressed a proof-verification cache issue

A day before the block production restart, Liquid issued an emergency update to Elements, the software underlying the network. In an earlier X update from Liquid_BTC, the organization described the fix as a response to a vulnerability involving proof-verification cache handling tied to the incident.

Liquid’s recovery plan includes hardening cache keys used for range proofs as part of the software update. The post states the new release is Elements v23.3.4, designed to strengthen how the system verifies proofs during recovery-related operations.

From an investor and builder standpoint, the key takeaway is that Liquid is not just “restarting”—it is changing the underlying mechanics that were implicated in the exploit pathway. That generally reduces the likelihood of a repeat incident once peg functions and transaction handling return.

What happened to the federation wallet balance

The operational pause was triggered on Sept. 6 after actors described as “white-hat hackers” withdrew approximately 4,000 BTC—valued around $320 million at the time—from Liquid’s federation wallet, according to earlier coverage from Cointelegraph.

Liquid previously indicated that the withdrawal involved L-BTC originating from a bug in Elements. The withdrawing portion represented about 95% of the federation wallet’s balance, which was roughly 4,200 BTC.

Subsequently, Cointelegraph reported that 3,400 BTC—worth about $270 million at the time—was returned after Blockstream confirmed that affected bridge nodes had been patched. Even with the return, 598 BTC—roughly $46 million at current prices—remained outstanding as of Sept. 7.

Liquid’s current emphasis on rebuilding its BTC/L-BTC reserve aligns with that earlier balance reality: peg operations are effectively the bridge between the reserve and minted/burned representations. Until the reserve is restored to safe levels and the system’s node components are verified to be operating correctly, resuming peg-outs would create avoidable settlement and redemption risk.

Why the “no transactions” restart is a meaningful step

The move to resume block production—while still withholding transactions—signals that Liquid believes its recovery controls are working, but that it is not yet comfortable restoring normal user workflows. In practice, it lets the network keep progressing at the protocol level, while limiting the number of moving pieces that could interact with remaining reserve and peg-state uncertainty.

As Liquid continues monitoring, the next practical question for market participants is whether peg operations will resume once reserve restoration is confirmed and node updates have been validated under real operating conditions.

Readers should watch Liquid’s follow-up status updates for any change in peg-out authorization and for confirmation that transaction processing can safely return—especially after the Elements v23.3.4 fix and the earlier bridge-node patching are fully validated against the incident’s root cause.

Hunter Biden has denied profiting from his LAPTOP memecoin after its launch-day price crash, adding that neither he nor his team had sold tokens.

Several X users accused the LAPTOP project of a “rug pull” after the memecoin lost more than 95% of its value in the first hour of trading on Wednesday. At the time of writing, the new token traded at $0.8562, according to CoinGecko data.

“The team’s allocation is locked. Nobody on our side sold, and nobody could have,” Biden said in an X post Wednesday. “I, personally, have not made a single dollar.”

Biden blamed the price action on insufficient liquidity and “snipers,” which are trading bots that quickly swoop up tokens when trading opens.

The Base memecoin takes its name from a MacBook Hunter Biden reportedly left at a repair shop in 2019. Trump allies used the New York Post’s reporting on files purportedly from the device against him and his father, former US President Joe Biden, during the 2020 election.

Before launching his own memecoin, Biden slammed the Trump family’s crypto ventures. In an Aug. 21 post, Biden said World Liberty Financial used political influence and leverage to benefit its founders.

Biden did not respond to Cointelegraph’s request for comment.

Related: Joe Biden’s son to launch memecoin, will send to TRUMP holders: WSJ

LAPTOP team announces liquidity incentives and token burns

The LAPTOP team defended the launch in a community update by claiming it held no token presale and made no allocations to investors or influencers. It said the contract address, token allocations, a Hacken security audit and a white paper were published before trading began.

“There was no stealth deployment, no hidden supply, and no surprise to benefit insiders,” the team said in a Medium post.

It claimed the initial pool launched at $0.05 per token, but the market maker’s liquidity was insufficient to meet demand.

LAPTOP added it would deploy 4 million tokens, or 0.4% of the total supply, as liquidity incentives for Aerodrome pools, starting at midnight UTC on Thursday. It also announced plans to burn 10 million tokens within the first week of launch through its predictions program, equivalent to 1% of the original total supply.

Related: California Senate passes bill to ban memecoin issuance by public officials

According to the project’s disclosures, founders are allocated 300 million tokens, or 30% of the 1 billion token supply. Those tokens are locked for six months and then vest monthly over the following 24 months.

Another 30% is allocated to predictions tied to political, cultural and crypto events. Tokens are burned when specified outcomes occur and allocated to charity otherwise. The disclosures say prediction-related burns affect unvested tokens.

The disclosures reserve 2% of the total supply for wallets that lost money on the TRUMP memecoin and 8% for eligible subscribers to Biden’s “Where’s Hunter” Substack newsletter. A separate 10% is allocated to future airdrops at the foundation’s discretion.

Nansen tracks wallet losses as Bubblemaps flags fresh holders

Nansen data shared with Cointelegraph on Thursday showed one LAPTOP wallet with an unrealized loss of $117,800 and another with a paper loss of $12,300.

Two other wallets showed unrealized gains of $13,100 and $1,800. None of those four addresses had sold LAPTOP at the time of the snapshot. The analysis covered five selected wallets.

Nansen also recorded 46,675 buy transactions and 16,038 sell transactions during the 24-hour period covered by its data, involving 20,085 unique buyers and 8,714 unique sellers.

Meanwhile, blockchain analytics platform Bubblemaps said Wednesday that 60% of LAPTOP’s top-holder wallets had no prior activity.

In a follow-up post, it defined “fresh” wallets as those funded within the previous 10 days and said most had been funded on launch day.

Magazine: Is Bitcoin too volatile to risk your retirement on?

Robinhood has added searchable asset pages for JUGGERNAUT and FRONG, helping the Robinhood Chain meme coins climb as much as 500% and 130%, respectively, despite neither token being available for spot trading on Robinhood Crypto.

Robinhood asset pages trigger meme coin buying

Whale Scan first drew attention to searchable Robinhood asset pages for JUGGERNAUT and FRONG on Thursday, although Robinhood did not announce spot trading support for either token.

The pages allow Robinhood users to search for the tokens and monitor their market data. They do not mean Robinhood Crypto has enabled customers to buy or sell either asset on its centralized trading platform.

Confusion over the distinction appears to have contributed to the initial reaction. Myriad Markets co-founder Farokh Sarmad told his followers that Robinhood had created pages for the tokens rather than completed exchange listings.

“Basically, all they make is asset pages on Robinhood and you can search the coin, it’s not a listing,” Sarmad said.

Neither Robinhood nor Robinhood Crypto announced spot support for JUGGERNAUT or FRONG at the time of writing. A future spot listing also remains unconfirmed, meaning the appearance of an asset page should not be treated as a promise that trading support will follow.

Market-data pages are common across financial platforms because they let users follow assets that the platforms do not offer for trading. In this case, however, traders linked the newly searchable pages to possible Robinhood exposure and moved into the tokens on-chain.

JUGGERNAUT price soars more than 500%

JUGGERNAUT recorded the larger move, rising more than 500% within an hour of the asset page becoming visible. The token later gave back some of the advance, but remained approximately 380% higher at the time covered by the source report.

During the 24-hour period, JUGGERNAUT traded between a reported low of $0.0022 and a high of $0.0208. Its trading volume increased by more than 3,000%, showing that the price move came with a sharp rise in market activity.

Such percentage gains can be magnified when a small token trades in pools with limited liquidity. Under those conditions, a wave of purchases can push the quoted price up quickly, while large sales may produce an equally fast decline.

FRONG followed with a gain of nearly 130% before trimming its advance to about 100%. The token traded near $0.0106 and reached an all-time high of $0.0164 during the rally. Its 24-hour trading volume increased by more than 1,300% as activity around the token accelerated.

The gains came while the main crypto market pulled back following hotter-than-expected U.S. producer inflation data. According to the source report, U.S. PPI inflation reached 5.6%, adding pressure to risk assets even as activity in the two Robinhood Chain tokens accelerated.

Robinhood Chain meme coins draw speculative volume

Robinhood built its Ethereum layer-2 network around tokenized stocks and other real-world assets, yet permissionless token creation has also turned the chain into an active venue for meme coin trading.

According to figures in the source report, decentralized exchanges on Robinhood Chain processed $4.5 billion in volume during the previous 30 days. Tokenized stocks, exchange-traded funds, commodities, and U.S. Treasuries accounted for $166.5 million in value on the network.

CASHCAT became an early example of the speculative activity. In July, crypto.news examined the token after its market capitalization reached about $156 million, even though the project had no formal connection to Robinhood Markets.

The report found that CASHCAT had a fixed supply of 1 billion tokens and described itself as “fan fiction with a ticker.” At one stage, its market value stood at roughly 12 times the value of all tokenized real-world assets then recorded on Robinhood Chain.

CASHCAT remains the only meme coin from the network identified in the supplied report as available for spot trading through Robinhood. JUGGERNAUT and FRONG, by comparison, can be traded through on-chain venues but have only received searchable pages on Robinhood’s asset directory.

Early activity also relied heavily on Noxa, a launchpad that supported more than 60,000 token deployments and controlled about 75% of launches on the chain. The platform later halted new launches after generating more than $12 million in fees, while CASHCAT fell by over 33%.

A separate examination of the Noxa platform outage found that its system added single-sided liquidity to Uniswap V3 pools when tokens launched. Noxa stopped accepting new projects on July 11, before its website became unavailable two days later.

U.S. users still face the risks of on-chain trading

Robinhood Markets is a U.S.-listed financial services company, but the presence of a token on Robinhood Chain does not make it an official Robinhood product. Permissionless networks allow outside developers to deploy tokens without the company creating, owning, or endorsing them.

For American users, the difference between a Robinhood asset page and a Robinhood Crypto market affects where and how a trade takes place. Buying an unsupported token through a decentralized exchange may require a self-custody wallet, network fees, and interaction with an on-chain liquidity pool rather than a standard Robinhood brokerage order.

Robinhood’s disclosures for supported crypto assets do not automatically extend to unrelated tokens deployed on its blockchain. Users must therefore check the contract address, available liquidity, and project ownership before making an on-chain transaction.

The Internal Revenue Service treats digital assets as property for U.S. federal tax purposes. A sale, exchange, or disposal of JUGGERNAUT or FRONG may create a reportable capital gain or loss for a U.S. taxpayer, including when the trade takes place through a decentralized exchange rather than a centralized platform.

Robinhood Chain has also faced pressure from heavy trading activity. Demand involving tokenized assets recently contributed to a network outage, temporarily disrupting transactions on a chain carrying stocks, ETFs, commodities and tokenized U.S. Treasuries.

The CLARITY Act has encountered a new Senate dispute over vertical integration rules ahead of its Sep. 15 cloture vote, which requires 60 votes to advance the crypto market structure bill.

CLARITY Act negotiations focus on vertical integration

Politico reported on Sep. 10 that Senate Democrats are pressing for language directing regulators to create standards for vertically integrated crypto businesses, adding another unresolved matter to negotiations over the CLARITY Act.

Under the proposal described by Politico, the standards would address conflicts that can arise when one company controls several parts of a crypto transaction or market. Democratic senators have argued that the language follows principles Republicans supported when the legislation moved forward earlier in 2026.

In crypto markets, vertical integration can place exchange operations, trading services, custody, and other functions under related corporate entities. FTX provided a prominent example because it operated a crypto exchange while its affiliated firm, Alameda Research, served as a market maker and conducted trading activity.

According to Politico, Republican senators support conflict-of-interest protections but have raised concerns about giving regulators extensive power over vertically integrated companies. GOP lawmakers fear that a future Democratic administration could use the provision against crypto businesses through stricter enforcement or rulemaking.

Industry representatives have also opposed the Democratic proposal, Politico said, although the supplied report did not identify the companies or trade groups involved in the discussions.

The disagreement has arrived as the Senate prepares for a procedural vote on Sep.r 15. Senate Majority Leader John Thune filed the cloture motion before the August recess, and the vote will determine whether senators can begin formal debate rather than decide whether the bill becomes law.

A recent crypto.news report on the Sep. 15 vote said cloture requires 60 senators. With Republicans holding 53 seats, supporters would need backing from at least seven Democrats or independents if every Republican votes in favor.

Senators seek common ground on consumer protections

Democratic Sen. Cory Booker is negotiating the vertical integration language with Republican Sen. Cynthia Lummis and Senate Agriculture Committee Chair John Boozman, according to Politico.

Booker told the publication that the two parties have “shared values” in the talks, indicating that they agree on the need to address certain conflicts even though they have not settled the bill’s wording.

At the same time, Booker made his support conditional on stronger safeguards for users.

“I will not support a bill that does not protect consumers from the potential downsides of a Web 3.0,” he told Politico.

Negotiators must decide how much authority regulators should receive, which companies would fall under the provision, and what conduct would violate the standards. Politico’s report did not say that lawmakers had reached a final agreement on any of those points.

The vertical integration issue joins an unsettled ethics provision covering crypto activity by public officials. Democrats and Republicans have yet to reach a bipartisan agreement on that section, while banks continue to press lawmakers for tighter restrictions on rewards tied to stablecoins.

Earlier coverage of the bill noted that an ethics clause in a July draft would restrict the president, vice president, members of Congress, and their spouses from issuing or sponsoring digital assets while in office. The Department of Justice would enforce the restriction under that version, with penalties reaching $250,000 per day.

Democrats have sought tougher enforcement and longer-lasting restrictions, while Republicans have warned that expanding the provision could cost the legislation White House support. President Donald Trump has urged Congress to approve the bill, but his family’s involvement in digital assets has kept ethics language at the center of the negotiations.

Stablecoin rewards remain another obstacle

Banking groups are separately lobbying against language that would allow certain rewards connected with stablecoins. The dispute concerns whether crypto exchanges and their affiliates should be permitted to offer payments that resemble interest on dollar-pegged tokens.

According to the earlier Sep. 10 report, the CLARITY Act would prohibit stablecoin yield that operates like interest on a bank deposit while permitting rewards connected with payments, transactions, or liquidity provision. Banks have called for restrictions to extend to exchanges and affiliated businesses.

Coinbase has a direct financial interest in the outcome because its USDC rewards programs generate about $1.35 billion in annual revenue, the report said. Banking groups contend that such products can draw deposits away from traditional lenders even when issuers do not label the payments as interest.

Treasury Secretary Scott Bessent has also urged senators to pass the CLARITY Act, warning that failure could weaken U.S. leadership in digital assets and limit tools used to oversee the sector. His intervention came as lawmakers continued talks over ethics, stablecoin rewards and consumer protection requirements.

For U.S. investors and crypto companies, the legislation would determine how federal oversight is divided between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The bill would create classifications for digital assets and establish registration and operating standards for exchanges, brokers, and dealers handling digital commodities.

The proposed regulatory framework would also require customer asset segregation and anti-money-laundering controls for registered digital-asset intermediaries. Non-custodial software developers could receive exemptions from money-transmitter registration under separate provisions, subject to limits involving illicit transactions.

September vote may not settle the bill’s fate

Even if the Senate approves cloture, the procedural result would only open debate. Senators could still amend the legislation before holding a final vote, and any version passed by the chamber would need to be reconciled with the House bill.

The House previously approved the legislation by a 294-134 vote, giving it bipartisan support in that chamber. Senate passage remains more difficult because supporters must first clear the 60-vote cloture threshold before reaching a final vote.

Coinbase CEO Brian Armstrong has said the crypto sector will still receive regulatory guidance if the Senate effort fails, as agencies can continue writing rules under their existing authority. Agency rules, however, would not carry the same permanence as federal legislation and could be revised by a later administration.

Scheduling has created another procedural constraint. House leaders canceled sessions planned for the weeks of Sep. 21 and Sep. 28, leaving little time to reconcile and approve a Senate version before lawmakers leave Washington for the midterm elections.

A final vote could therefore move into the lame-duck session after the elections even if senators approve cloture on Sep. 15. Polymarket traders currently assign a 17% probability that President Trump will sign the CLARITY Act into law before the end of 2026.