Cetus looks for Sui community approval to access $162 million to reimburse users.
The Cetus protocol, built on Sui, announced on May 27 that it has the ability to reimburse all users impacted by the exploit that occurred on May 22, contingent on the approval of Sui token holders during an upcoming on-chain vote regarding the release of frozen assets.
In a statement on May 27, Cetus claimed that its cash reserves, token holdings, and a secured loan from the Sui Foundation provide sufficient funds to cover the $61 million worth of assets that the attacker siphoned to Ethereum.
As per a May 27 announcement from Sui, the loan is designated strictly for the amount that was bridged beyond Sui, excluding the $162 million that validators have already locked within the network.
A forthcoming vote within the community will determine whether the tokens frozen by validators after the attack should be released.
Cetus has urged the Sui community to “extend full support” in its effort to reimburse affected users. The protocol also committed to publishing a detailed repayment strategy, irrespective of the vote’s decision.
This exploit ranks as the ninth most significant hack in the cryptocurrency sector by the amount stolen, according to the Rekt News leaderboard.
Path to Recovery
The Sui Foundation confirmed the arrangement through a separate announcement, labeling the loan as an “extraordinary measure” aimed at ensuring user balances are restored beyond what Cetus could manage independently.
Officials from the Sui Foundation indicated that the community vote proposal will be made available on-chain “shortly,” and validators are prepared to release the frozen tokens pending approval from holders.
Additionally, executives from the Foundation stated that the funds from the loan are currently in escrow, and deployment could happen soon after the smart contract community concludes the proposal.
Cetus halted all operations on May 22 following a breach of its pricing logic due to an exploit.
On-chain analytics reveal that the incident resulted in $223 million worth of tokens being compromised, with $61 million transferred to Ethereum and $162 million frozen by Sui validators.
Cetus reached out to the perpetrator via on-chain communications, offering a $6 million reward for the recovery of the assets transferred to Ethereum. However, there was no response from the attacker.
Developers expressed their “deep regret” over the incident and vowed to “commence recovery efforts immediately” once the reimbursement framework is set.
Cetus reiterated its commitment to rebuilding user confidence, prioritizing transparency with regular updates on progress. The protocol has not provided an estimated timeline for code fixes or the resumption of trading activities.
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