Cetus Protocol, the largest decentralized exchange (DEX) on the Sui blockchain, has secured a critical loan from the Sui Foundation to fully reimburse users affected by a $223 million exploit last week. This intervention aims to stabilize Sui’s DeFi ecosystem and restore user trust.
Loan Enables 100% User Compensation
The Sui Foundation confirmed the issuance of the loan, stating that it was an “extraordinary measure” aimed at preserving community confidence and supporting the ecosystem’s recovery.
“This includes a critical loan from the Sui Foundation, making a 100% recovery for all affected users possible,” Cetus stated.
While this loan covers bridged assets, an additional on-chain governance vote will determine whether $162 million in frozen tokens can be released to complete full reimbursement.
🧿 Exploit Used Spoof Tokens to Drain Liquidity Pools
The attacker manipulated spoof tokens, including fake assets like BULLA, to exploit flawed price curve logic in Cetus smart contracts. This allowed them to drain real assets like SUI, USDC, and others from liquidity pools without depositing equivalent value.
Over $162 million in assets were frozen on-chain, while others were routed through cross-chain bridges and obfuscation tools. The attacker’s wallet remains active, reportedly still holding over 12.9 million SUI.
On-Chain Vote May Unlock Frozen Funds
Cetus plans to reimburse users immediately using a combination of the loan, its reserves, and potentially the frozen funds—pending approval by the Sui community via on-chain governance.
The Sui Foundation noted:
“A full recovery is possible with the community’s support.”
Impact on CETUS and DeFi Market
Following the attack, Cetus paused all smart contracts and launched a full investigation. Its native token, CETUS, fell nearly 40%, and trading activity on Sui’s DeFi platforms declined sharply amid renewed security concerns.
With this aggressive recovery effort, the Sui ecosystem hopes to rebound and reinforce user trust in its infrastructure.