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This doesn't make sense to me:

Even if Blockstream publicly states, "it's a bug bounty, we gave it to them" these btc have a huge target on them. There is no world where they don't have to take significant measures to obfuscate the source of these coins. Is there something I don't understand here?

Totally. Whatever Blockstream agrees to, is done under duress and can be taken back. The thieves won't have comfort knowing that no one is coming after them.

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