The Sui Network, a Layer-1 blockchain, recently experienced a significant incident involving its largest decentralized exchange (DEX) and liquidity provider, Cetus Protocol. On May 22, 2025, Cetus suffered a major exploit, resulting in substantial losses and market disruption. Here are the key details:
Exploit Overview: The Cetus Protocol was drained of significant liquidity, with estimates of losses ranging from $11 million to $260 million in SUI tokens and other assets. The exploit primarily affected the SUI/USDC liquidity pool, which was nearly emptied, causing a sharp drop in token prices (over 75% for many assets) and severely impacting trading activity.
Nature of the Incident: The Cetus team described the issue as an "oracle bug" rather than a deliberate hack, but blockchain analysts and compliance firms, such as AMLBot, raised concerns about transparency. Evidence suggests the exploiter manipulated the price curve or reserve math, swapping spoof tokens and adding minimal liquidity to drain the pool. The exploiter reportedly bridged stolen USDC off-chain in $1 million batches, with some estimates indicating $212 million moved to Ethereum.
Market Impact: The SUI token initially saw modest gains despite the panic but later plunged sharply, wiping out earlier gains. This followed a peak price of around $4.15, with a significant price reversal after news of the exploit spread around 7:45 a.m. EST. The broader crypto market also faced volatility, contributing to the sell-off.
Response: The Cetus team halted smart contracts to prevent further losses, and investigations are ongoing to determine whether it was a bug or a deliberate exploit. Blockchain data shows the exploiter’s wallet (0xe28b50) holds over 12.9 million SUI, valued at approximately $54 million.
Recent Context: Prior to this, Sui had been gaining traction with positive developments, including a partnership with 21Shares to expand SUI adoption, integration of Peg-BTC (YBTC) for Bitcoin DeFi capabilities, and cross-chain interoperability with Axelar Network. The network’s total value locked (TVL) had reached $2.06 billion, ranking it eighth among blockchains. However, this exploit has raised concerns about security and trust.