Sui steps in to shield users after Cetus breach

The Sui Foundation has extended critical financial support to Cetus Protocol, the leading decentralized exchange (DEX) on the Sui blockchain, following a $223 million exploit that shook the platform last week. The foundation has issued a loan that enables full reimbursement of affected users, with final repayment tied to the outcome of an upcoming on-chain community vote.

According to a statement shared by Cetus on X, the loan will be used to cover the off-chain bridged assets stolen in the attack. This compensation is distinct from the $162 million in frozen on-chain assets, which remain locked and are the subject of a pending governance proposal that will determine whether they can be used to complete the reimbursement process.

Using our cash and token treasuries, we are now in a position to fully cover the stolen assets currently off-chain if the locked funds are recovered through the upcoming community vote, Cetus emphasizing that the loan from the Sui Foundation makes “a 100% recovery for all affected users possible.

The Sui Foundation echoed the sentiment, calling the move an “extraordinary measure” aimed at safeguarding the ecosystem. A full recovery is possible,” the Foundation said, “but it requires the support of the community.

The exploit, which occurred last week, involved a sophisticated manipulation of spoof tokens such as BULLA to exploit flawed price curves and reserve logic within Cetus’ liquidity pools. By using these spoofed tokens, the attacker was able to drain significant amounts of SUI, USDC, and other real assets without providing equivalent value.

In total, more than $223 million was compromised. While over $162 million in tokens were quickly frozen on-chain, the remaining assets were bridged out using various cross-chain paths. The attacker’s wallet remains active and was last seen holding over 12.9 million SUI, with other assets likely obscured through swaps or mixed across networks.

In immediate response, Cetus paused its smart contracts and launched an internal investigation. The protocol’s governance token CETUS plummeted nearly 40% amid the incident, and overall trading activity across Sui’s DeFi ecosystem slowed significantly due to liquidity fears and mounting concerns over protocol safety.

With the new loan secured from the Sui Foundation, Cetus now says it is in a position to begin reimbursing affected users immediately. However, full resolution depends on the approval of the community governance vote, which will decide whether the frozen on-chain funds can be utilized for final settlement.

The situation has spotlighted both the vulnerabilities in decentralized finance protocols and the proactive role blockchain foundations can play in crisis response. The Sui Foundation’s financial backing, combined with community governance, represents a rare coordinated attempt to restore user trust and liquidity in the aftermath of a large-scale exploit.

As the governance vote approaches, all eyes will be on whether the Sui community rallies to enable a full recovery and whether such models become a precedent for future incidents in DeFi.