Cetus Offers 6 Million Reward for 223 Million Stolen Funds

Cetus, a decentralized exchange (DEX) on the Sui blockchain, has proposed a recovery plan for the $223 million stolen in a recent exploit. The plan involves offering the hacker a $6 million reward and immunity from legal action if the remaining funds are returned. This strategy mirrors a successful recovery effort by Crema Finance, a Solana-based DeFi project that suffered a $9 million hack in 2022. The same development team is behind both projects, and the recovery plan for Crema involved a similar negotiation with the hacker.

The bounty offer has sparked controversy within the community. Many users argue that the damage has already been done, particularly to holders of the CETUS token, which plummeted in value following the incident. Critics also question the centralization risks exposed by Sui validators freezing the stolen funds. The move, aimed at aiding recovery, has been criticized for potentially undermining the decentralized nature of the network.

Sui validators have collectively blocked transactions from the hacker’s addresses, effectively freezing $162 million of the stolen funds. However, this action has raised concerns about the network's decentralization, as Sui has only 114 validators compared to over 1 million on Ethereum and 1,157 on Solana. Some community members defend the move, arguing that decentralization allows for collective action without needing permission, while others see it as a sign of centralized control.

The proposed function to bypass safety checks for specific transactions, though not implemented, further highlights the tension between security and decentralization. The debate over decentralization is not unique to Sui; similar issues have arisen in other networks following high-profile hacks. The community's response to the Cetus exploit underscores the ongoing challenges in balancing security and decentralization in DeFi.

As of now, the hacker has not accepted Cetus’ offer, and the stolen funds remain frozen. The situation highlights the persistent security challenges in DeFi and the complex dynamics of decentralized networks. The outcome of this incident will likely influence future approaches to security and recovery in the DeFi space.