The Sui community has made a significant decision to return $162 million in frozen assets to the victims of the Cetus exploit. This initiative not only demonstrates the community’s commitment to user restitution but also reinforces the integrity of the ecosystem in the wake of a major security breach.
Sui Network Validators Freeze $162 Million in Stolen Assets
On May 22, the Cetus Protocol experienced a severe exploit that drained over $223 million from its liquidity pools when attackers exploited a vulnerability in third-party code. Following this breach, Sui network validators took immediate action to freeze approximately $162 million worth of stolen assets, preventing further damage.
This swift response from the validators initiated a structured recovery process, culminating in a community vote that concluded on May 29. An overwhelming majority of 90.9% of validators voted in favor of the proposal, while 1.5% abstained and 7.2% did not participate.
Update – Validators representing 90.9% of stake have said “Yes” in the onchain community vote, and the vote has concluded early.
With this result, the impacted funds will be moved to a multi-sig wallet and held in trust until they can be returned to users according to the plan… https://t.co/qG8aPAhD8e pic.twitter.com/WjiSbLWt8n
— Sui (@SuiNetwork) May 29, 2025
The recovered funds will be transferred to a multi-signature wallet held in trust, facilitating a transparent asset restitution mechanism for the affected users. Cetus, having appealed for community assistance shortly after the exploit, has committed to combining the recovered assets with its own treasury and an emergency loan from the Sui Foundation.
This comprehensive recovery plan aims to ensure that all affected users receive complete compensation, thereby restoring trust in the protocol and the wider ecosystem.
Sui and Cetus Respond to the May 22 Exploit
While the vulnerability that led to the exploit was identified in Cetus’s code, the Sui community has treated this incident as a crucial learning opportunity. In response to the breach, the Sui Foundation announced a $10 million initiative to enhance protocol security through improved auditing practices and formal verification tools.
Additionally, the network is extending its bug bounty program to include high-value protocols, further solidifying its long-term commitment to ecosystem security. Cetus has also released a detailed roadmap outlining its recovery and restart plans, which are expected to unfold over the coming week.
The first step involves validators implementing an upgrade to transfer funds to the multi-signature wallet, after which Cetus will activate its emergency recovery pool and complete a restoration of its data infrastructure.
In a post shared on May 29, Cetus stated that a dedicated compensation contract is under development and will be submitted for auditor review before deployment.
Within just 48 hours, the Sui community united to pass a critical on-chain vote — marking a pivotal moment for the entire ecosystem. Cetus extends our deepest gratitude to the >90% of validators and stakers who voted in favor. Regardless of your stance, your participation… https://t.co/UN2DrlDRTw
— Cetus🐳 (@CetusProtocol) May 29, 2025
Once the protocol is back to full functionality, liquidity providers in the affected pools will once again have access to their assets, while any residual losses will be addressed through the compensation contract.
While the rapid actions of the community have garnered praise from many in the cryptocurrency industry, concerns have been raised regarding the validators’ authority to freeze on-chain funds. Nonetheless, the decisive governance process and transparent communications have bolstered community trust and demonstrated Sui’s readiness to tackle large-scale security challenges.
Notably, despite a drop in prices following the Cetus exploit, Sui has achieved the highest monthly DEX volume in its history. As the vote is finalized and relaunch efforts are already underway, both Cetus and the Sui ecosystem are poised for a resilient comeback.
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