Cetus Protocol, recognized as the largest decentralized exchange (DEX) on the Sui blockchain, has recently secured a significant loan from the Sui Foundation. This critical financial support aims to facilitate the full compensation of users affected by a staggering $223 million exploit that occurred last week.
The newly acquired funds are specifically designated to cover the bridged assets and are distinct from the frozen funds that are currently subject to an on-chain community vote. In a recent statement publicized through an X post, Cetus expressed optimism, stating, “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.”
The path to recovery for affected users is contingent upon the outcome of a pending governance proposal, which seeks authorization for the use of frozen funds to complete these reimbursements. The Sui Foundation added weight to the recovery initiative, noting that “these are extraordinary measures taken to protect the Sui community” and asserted that “a full recovery is possible” with the support of the community.
The exploit that rocked Cetus involved an attacker taking advantage of manipulated spoof tokens, such as BULLA, to exploit vulnerabilities in price curves and reserve logic. This manipulation enabled the attacker to siphon off SUI, USDC, and various other assets from liquidity pools without providing equivalent value in return. At the time, over $162 million in stolen tokens were temporarily frozen on-chain, while a considerable portion was transferred out of the system via multiple pathways. The perpetrator’s wallet remains active, reportedly holding over 12.9 million SUI, with additional assets possibly being swapped or hidden across different networks.
In the wake of the exploit, Cetus took immediate action by pausing its smart contracts and launching an investigation into the incident. The exchange’s governance token, CETUS, witnessed a significant decline, dropping nearly 40% due to the uncertain trading activity and liquidity concerns plaguing Sui’s DeFi ecosystem.
With the acquisition of the loan from the Sui Foundation, Cetus is now poised to initiate the user reimbursement process promptly. The community’s engagement and support during this critical time will be essential in restoring confidence and stability within the Sui blockchain landscape.
