On May 22, 2025, the decentralized exchange Cetus Protocol, a key liquidity provider in the network,
suffered a hacking attack, resulting in $223 million worth of assets being stolen. The attackers exploited a vulnerability in the business logic of the smart contract, leading to nearly complete depletion of the liquidity pools. Tokens of the Sui ecosystem, including SUI and
lost up to 90% of its value, and the stablecoin USDC lost its peg to the dollar, trading at $0.9996. The Cetus team froze $162 million in stolen assets and offered the hacker $6 million for the return of funds, but the offer was rejected.
On May 27, the Sui community began voting on a protocol update to return frozen assets without changing transaction history.
$Sui Foundation provided the code for on-chain voting, and validators and SUI token holders can participate through stake delegation. Cetus is expected to use its own reserves and credit from the Sui Foundation for full reimbursement of losses. Critics warn that this could undermine the decentralization of the network.
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