Cetus Protocol recovers 73.6% of $220 million stolen in hack

Cetus Protocol, a prominent decentralized exchange (DEX) on the Sui blockchain, is in the process of recovery following a significant hack that occurred on May 22, 2025. The incident resulted in the theft of over $220 million in various digital currencies. The attack exploited vulnerabilities in the platform’s smart contracts, allowing hackers to withdraw large sums of money with minimal input. The stolen funds included SUI tokens, stablecoins like USDC, and other tokens, some of which experienced rapid devaluation as they were drained.

Despite the severity of the attack, swift action by the Sui network validators was crucial in mitigating the damage. Approximately $162 million of the stolen funds were quickly frozen, preventing further loss. This rapid response was pivotal in containing the fallout and ensuring that a significant portion of the stolen assets could be recovered.

Following the freezing of the funds, the Sui community was called upon to decide the next steps. A proposal to move the recovered funds to a secure multi-signature wallet was put to a vote. On May 29, 2025, the community overwhelmingly supported the proposal with 90.9% in favor, demonstrating a strong collective effort to address the issue and support affected users.

The multi-signature wallet, managed jointly by Cetus Protocol, the Sui Foundation, and the security firm OtterSec, ensures that the funds are handled with the utmost security and transparency. The transfer of the $162 million to this secure wallet was completed around May 31, 2025, marking a significant milestone in the recovery process.

Cetus Protocol has outlined a comprehensive plan to fully recover and compensate affected users. The platform will utilize its own treasury funds, an emergency loan from the Sui Foundation, and the recovered assets to ensure that all users receive their lost funds. This multi-faceted approach aims to address the financial impact on users, even those whose specific assets were not part of the frozen $162 million.

The recovery process involves several critical steps. Sui network validators will assist in distributing the recovered funds from the multi-signature wallet according to Cetus’s plan. Concurrently, Cetus is working to enhance the security of its smart contracts and restore liquidity to the platform. The goal is to have all services fully operational and the platform restarted within approximately one week after the community vote. Additionally, a compensation system is being developed to ensure that users receive their due payments, with safety checks in place before implementation.

Throughout this challenging period, Cetus Protocol has maintained open communication with its users, providing updates on the recovery progress. The team has expressed regret for the incident and its impact, emphasizing the importance of community collaboration to rebuild trust. A community meeting is planned to share more details about the hack and the ongoing recovery efforts. The coordinated efforts between Cetus, the Sui Foundation, Sui validators, and security experts like OtterSec highlight a robust response to the crisis within the digital currency ecosystem.