Cetus Protocol is moving to reimburse users affected by a $223 million exploit last week, following a financial lifeline from the Sui Foundation and an ongoing governance vote that would release frozen on-chain assets linked to the attack.
The Sui Foundation on 28 May confirmed it has issued a $60 million loan to support immediate compensation, with Cetus already initiating the first round of reimbursements. The funds will cover losses from assets that were bridged off-chain, while the recovery of frozen tokens—currently valued at $162 million—will depend on the outcome of a community vote.
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Cetus to Reimburse All Victims of $223M Hack After Sui Foundation Loan and Community Vote. Source: X
The exploit, which took place on May 23, allowed a hacker to manipulate Cetus’s liquidity pools using counterfeit tokens, draining assets including SUI, USDC, and others. While the attacker was able to bridge some funds to Ethereum, a large portion was frozen on-chain after Sui validators coordinated to block outgoing transactions.
Cetus stated that a full recovery plan is in place, supported by both internal reserves and the Foundation’s loan.
We are now in a position to fully cover the stolen assets currently off-chain, if the locked funds are recovered through the community vote.
the team said.
CETUS Price Rebounds Following the Recovery Plan
Markets responded quickly. The CETUS token rose 27% following the announcement of the loan and initial community support for the vote. The token is trading at $0.165 today on 28 May.
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CETUS Token Climbs as Recovery Begins. Source: CoinMarketCap
A governance vote is now underway that would allow the network to execute two special transactions. These are hardcoded into a future protocol upgrade, to move the frozen funds into a new multisig wallet controlled by Cetus, the Sui Foundation, and blockchain security firm OtterSec.
As of Friday, more than 711% of voting SUI tokens were in favor of the proposal. The vote remains open for another day, but the current margin suggests the plan will pass. Only one validator, Stakefish, has voted against the proposal. The Sui Foundation has chosen to abstain.
Majority of SUI community votes in favor of recovery proposal. Source: Sui Explorer
Is Sui Fully Decentralized?
The validator-led response has sparked a wider conversation around decentralization on Sui. Operating a validator requires 30 million staked SUI, limiting participation to large stakeholders. Critics argue that the ability to coordinate blacklist enforcement so quickly points to centralization risks.
Supporters, however, say the rapid action helped contain losses and demonstrates Sui’s operational agility. The governance vote, in contrast to the earlier validator patch, offers a more transparent and democratic mechanism for resolving the crisis.
Following proposal approval, the Sui network will initiate a protocol upgrade that triggers the asset recovery. The plan includes strict conditions: only two attacker-controlled wallets are affected, and only specific stolen tokens will be moved.
Cetus has pledged to proceed with reimbursements regardless of the vote’s outcome. However, the release of frozen funds would allow for 100% restitution to all affected users.
