Sui Network Faces Criticism Over Smart Contract Exploit Handling

Blockchain analyst ZachXBT has publicly criticized Sui Network’s security infrastructure and its handling of a recent smart contract exploit. The incident, which affected several DeFi protocols built on the Sui Network, was disclosed by Sui’s security team on June 2. The attacker exploited a vulnerability related to “DeepBook,” the network’s order book engine, leading to significant concerns about the network's security measures.

ZachXBT’s criticism centers on Sui’s decision to handle investigations in-house, which he argues has limited the network’s ability to respond effectively and track stolen funds. He highlighted that Sui’s reliance on internal tools and processes has slowed its ability to handle the breach. “Teams need to stop trying to do everything in-house because they are cheap,” ZachXBT stated in a post on X. “Any attacker will want to move funds off of Sui ASAP via bridges or CEXs to Bitcoin, Ethereum, Tron, or Solana.” He emphasized that Sui’s native-only tools make it difficult to track cross-chain fund movement, especially in complex laundering scenarios.

ZachXBT compared Sui’s handling of the incident to that of Aptos, a rival Layer 1 blockchain. He noted that Aptos had faced similar issues but responded swiftly after he made public recommendations. Aptos’ rapid adoption of cross-chain monitoring tools reportedly helped freeze a large amount of stolen funds linked to a DPRK attack earlier this year. “There’s no excuse why Sui has not been able to do the same,” ZachXBT added, suggesting the delay is due to internal mismanagement.

Despite the criticism, Sui has taken steps to address the incident. Earlier, the network launched an on-chain vote that led to the successful transfer of $160 million in exploited funds to a multisig wallet. The funds are now jointly managed by Cetus, the Sui Foundation, and OtterSec, with over 90% of validators and stakers supporting the move. Cetus has begun restoring the protocol, including upgrading its liquidity market maker contract and planning asset conversion and compensation strategies.

The incident highlights the importance of robust incident response infrastructure in blockchain networks. ZachXBT’s critique underscores the need for third-party tools and cross-chain monitoring capabilities to effectively track and recover stolen funds. As blockchain technology continues to evolve, networks must prioritize security and incident response to build trust and ensure the safety of user funds.