Following last week’s $223 million security breach on the Cetus Protocol, the largest decentralized exchange on the Sui blockchain, the Sui Foundation has provided a crucial loan to enable full compensation for affected users.
The loan covers only the bridged assets lost in the exploit and is separate from the frozen tokens locked on-chain, which are subject to an upcoming community vote to determine their use.
Cetus confirmed in a recent post on X that, by leveraging funds from the Sui Foundation alongside its own reserves, it can fully reimburse users for stolen assets held off-chain — provided the community approves the unlocking of frozen funds.
“This critical loan from the Sui Foundation brings us closer to achieving 100% recovery for those impacted,” the protocol said.
The full reimbursement depends on the outcome of the on-chain governance vote that would authorize using the frozen assets to complete payouts.
The Sui Foundation described these efforts as extraordinary measures aimed at safeguarding the Sui ecosystem, noting that with community support, a complete recovery is attainable.
The attack exploited vulnerabilities in Cetus’s pricing algorithms by manipulating spoof tokens like BULLA to drain real assets including SUI and USDC from liquidity pools without providing equivalent collateral.
While more than $162 million of stolen tokens were frozen on-chain shortly after the hack, other assets were moved out via bridging. The attacker’s wallet remains active, currently holding over 12.9 million SUI, with some funds likely hidden or converted across multiple networks.
In response to the breach, Cetus paused its smart contracts and launched an investigation. Its governance token, CETUS, dropped nearly 40%, and trading volumes across Sui’s DeFi sector declined amid heightened concerns over security.
With this new loan from the Sui Foundation, Cetus is positioned to begin reimbursing users immediately, marking a key step toward rebuilding trust within the community.
