Sui Foundation Supports Cetus Loan for User Compensation

Following a devastating $223 million hack, Cetus Protocol has announced a user comprehensive plan to reimburse affected users, leveraging a loan from the Sui Foundation and its treasury funds, signaling a robust recovery effort within the Sui ecosystem.

Cetus Secures Loan from Sui Foundation

On May 22, 2025, Cetus Protocol, the largest decentralized exchange (DEX) and liquidity provider on the Sui blockchain, suffered a massive security breach, resulting in the loss of approximately $223 million in digital assets. 

The exploit, attributed to a vulnerability in Cetus’s smart contract pricing mechanism, allowed attackers to manipulate liquidity pools using spoof tokens, draining significant funds, including $11 million from the SUI/USDC pool. 

Read more: Cetus Protocol Hackers Exploited $223M, Terrorizing the SUI Ecosystem

The attack sent shockwaves through the Sui ecosystem, causing a 40% drop in the CETUS token price and a 14% decline in SUI value, alongside severe disruptions to other Sui-based tokens, which lost nearly all their value.

In response, Cetus swiftly paused its smart contracts to prevent further losses and collaborated with the Sui Foundation, validators, and other DeFi protocols to freeze $162 million of the stolen funds. Despite these efforts, approximately $61 million was bridged to Ethereum, complicating recovery.

To address user losses, Cetus has secured a loan from the Sui Foundation, ensuring full compensation, a move that has garnered significant attention within the crypto community.

7-Day Voting Process for Compensation Plan

The Cetus user comprehensive plan, which aims to restore user confidence, is subject to a community-driven vote involving Sui validators and token holders through stake delegation. 

The voting began at 8:00 PM on May 27 and runs until 8:00 PM on June 3, 2025 (UTC). The proposal requires over 50% of staked SUI to participate (excluding Abstain) and a majority of approving votes to pass. 

As of now, 37 of the 114 Sui validators have voted, with a 100% approval rate, signaling strong community support.

The Sui Foundation’s support has been pivotal, with the organization not only providing financial backing but also releasing code to facilitate the on-chain voting process.  

This incident has sparked debates about decentralization, as the Sui validators’ ability to freeze funds raised concerns among some community members about centralized control. However, others defended the action as a necessary measure to protect users, citing similar interventions by Ethereum and Solana in past exploits.

With $160 million already secured and plans for full reimbursement underway, Cetus’s response could set a precedent for handling DeFi breaches.

The community’s positive response to Cetus Protocol’s democratic approach has driven a 24% surge in the CETUS price over the last 24 hours, with the token now trading at $0.1591.