Sui Validators Approve $162 Million Token Release for Cetus Reimbursement

Validators representing nearly 91% of Sui stake approved an on-chain proposal to release about $162 million in tokens seized during the Cetus exploit. This decision allows the decentralized exchange (DEX) to reimburse users and restore full operations. The 48-hour referendum closed on May 29, with more than two-thirds of the network endorsing the measure. The approved transaction instructs validators to transfer the frozen tokens to a multi-signature wallet controlled by Cetus, security auditor OtterSec, and the Sui Foundation. The foundation confirmed the outcome and stated that the funds will remain in trust until Cetus executes its repayment plan. This decision resolves a key uncertainty that followed the May 22 attack, which drained an estimated $223 million in liquidity. Attackers bridged roughly $61 million to Ethereum before validators halted the address, leaving $162 million stranded on Sui. Cetus had informed users on May 27 that it could cover the bridged amount through its reserves and a short-term loan from the foundation, but it needed the community’s consent to unlock the frozen balance.

Cetus outlined an eight-step recovery schedule, targeting a complete relaunch within one week. Validators will first execute the protocol upgrade, which transfers the locked assets into the tri-party wallet. Engineers have already completed an emergency update to the concentrated-liquidity market-maker contract and sent it for audit. The team will then restore pool data, calculate individual liquidity deficits, and convert the retrieved tokens back to their original composition. Because attackers executed extensive swaps during the exploit, Cetus plans to use “minimal-impact strategies” to avoid further slippage while rebalancing pools. Developers are creating a compensation contract that will distribute any unrecovered amounts once the auditors complete their review. Cetus is committed to transparent progress reports during the recovery week and stated that staff are “fully mobilized” to meet the timeline. Funds will be transferred to the multi-sig wallet once the validators finalize the upgrade, clearing the way for Cetus to reimburse users and bring its exchange back online.

This event underscores the importance of community governance in decentralized finance (DeFi) platforms. The swift approval of the proposal by validators demonstrates the effectiveness of on-chain governance in addressing critical issues. The decision to release the frozen tokens and the subsequent steps taken by Cetus to restore operations highlight the resilience and adaptability of the DeFi ecosystem. The involvement of the Sui Foundation and security auditor OtterSec in managing the funds ensures transparency and security throughout the process. Cetus's commitment to transparent progress reports and its mobilization of staff to meet the recovery timeline further reinforces the platform's dedication to its users and the broader DeFi community.