Sui-based Cetus confirms $223m hack, pauses smart contract

Sui liquidity provider Cetus confirmed a loss of 223 million dollars due to a hack, says it’s taking steps to recover funds

On Thursday, May 22, Cetus confirmed that it was a victim of a hack which accounted for $223 million in losses. The confirmation came after the Sui-based (SUI) liquidity provider paused the smart contract to prevent more losses.

According to Cetus, the protocol was able to safeguard $162 million out of the compromised assets by halting smart contract activity. The remaining funds are being transferred across multiple Sui wallets, many of which have already been blacklisted.

Cetus stated it is working with the Sui Foundation to contain the damage and recover as many funds as possible. The Sui Foundation noted that validators have taken steps to ignore transactions originating from wallets linked to the hack.

“Cetus worked together with the other DeFi protocols, the Sui Foundation, and the Sui validators to collectively protect the ecosystem. A large number of validators identified the addresses with the stolen funds and are ignoring transactions on those addresses until further notice,” Sui Foundation.

Cetus hack pause ignites criticism

The hack ignited criticism on social media, where users have raised concerns about centralization. Many pointed to the ability of Cetus to pause its smart contract as evidence that the project lacks true decentralization. In a decentralized finance protocol, no single party should have the authority to halt execution unilaterally. Cetus paused the contract immediately after revealing the breach.

Criticism was also directed at the Sui Foundation, particularly its role in censoring transactions linked to the attack. One user commented, “What’s worse? A hacker stealing funds, or validators freezing wallets.”

Neither the Sui Foundation nor Cetus has responded directly to these concerns.

Following the incident, the Cetus Protocol token fell nearly 40 percent, dropping from a high of 0.25 dollars to 0.155 dollars. The Sui token also declined by 4 percent, trading at 3.89 dollars.