Cetus Blockchain Faces $223 Million Hack, Proposes Protocol Upgrade to Recover 73% of Funds

Cetus Blockchain, a decentralized finance (DeFi) platform, is grappling with a substantial security breach following a $223 million hack on May 22, 2025. In response, the platform has proposed an on-chain vote to implement a protocol upgrade aimed at recovering $162 million of the stolen funds. This upgrade is designed to return the locked funds to users without reversing transaction history or rolling back the blockchain.

The Sui Foundation, which oversees the Sui blockchain where Cetus operates, has announced its neutrality in the upcoming community vote. The foundation emphasized its role as a facilitator, highlighting the importance of community governance. The vote will involve major network participants, including validators and SUI token stakers, who will collectively decide on the protocol upgrade.

In an effort to mitigate the damage, Sui validators swiftly implemented emergency measures to freeze the stolen assets. Over one-third of validators by stake weight ignored transactions from two addresses believed to be connected to the attack, effectively immobilizing approximately $162 million worth of digital assets. However, approximately $60 million in assets had already been moved before the freeze took effect. Cetus is now collaborating with security firms and international law enforcement agencies to recover the remaining compromised funds.

Cetus has also offered a $5 million bounty to the hacker in exchange for the return of the stolen funds. This bounty is part of a broader strategy to incentivize the return of the assets and to demonstrate the platform's commitment to customer restitution. The Sui Foundation has set two conditions for supporting the community vote process: the foundation will maintain complete neutrality regarding the outcome, and Cetus must publicly commit to deploying all available financial resources toward full customer restitution.

The protocol upgrade vote is a critical step in addressing the aftermath of the hack. It involves major network participants, including validators and SUI token stakers, who will collectively decide on the best course of action. Cetus has expressed willingness to respect whatever decision emerges from the community vote, acknowledging that no single entity can make this decision unilaterally.

The Sui blockchain and its decentralized exchange, Cetus, are working together to address the aftermath of the hack. The platform's response, including the proposed protocol upgrade and the $5 million bounty, demonstrates a proactive approach to mitigating the damage and ensuring the security of its users' funds. The community vote and the subsequent actions will be crucial in determining the future of Cetus and its ability to recover from this significant security breach.