Sui Foundation Offers Loan to Cetus for User Compensation After $223M Exploit
the Sui Foundation has provided a secured loan to decentralized exchange cetus. This move aims to fully compensate users affected by a recent $223 million exploit. The foundation announced this on X on May 27.
The loan will cover funds that the hacker managed to transfer out of the sui network before validators froze their wallets.Cetus will use the loan along with its treasury assets to reimburse affected users. However, this depends on the community approving an on-chain vote to unlock the frozen funds.
Cetus echoed this sentiment,apologizing for the incident and asking the sui community to support the recovery vote. The team stated, “We can now fully cover the stolen assets if the locked funds are recovered through the upcoming community vote.”
The exploit occurred on May 22, targeting a flaw in Cetus’ concentrated liquidity market maker contracts. the attacker manipulated prices using a flash swap and drained several pools by faking liquidity deposits and repeatedly withdrawing real tokens.
The attacker managed to transfer a notable amount of stolen assets to Ethereum, even though validators froze $162 million on-chain. This incident caused the CETUS token to drop by 40% and is still 20% down in the past week.
The Sui Foundation acknowledged its role in supporting ecosystem-wide security. Alongside the loan, it announced an additional $10 million commitment to fund audits, bug bounties, and formal verification tools. the foundation also intends to broaden its bug bounty program to include high-value protocols like Cetus.
While validators’ fast action helped prevent further damage, some community members voiced concerns about freezing wallets undermining blockchain decentralization. Others praised the swift response and transparent handling of the crisis.
A detailed recovery plan from Cetus is expected soon. Compensation efforts are scheduled to begin nonetheless of the vote’s outcome, though full recovery depends on whether the community supports unfreezing the remaining funds.
