Full Sail DeFi Protocol Shutdown On Sui Network After $91K Crypto Hack

Crypto Hack News: Full Sail To Exit Sui Network After Oracle Exploit

The Full Sail shutdown on the Sui ecosystem news broke early on September 2, 2026, when the protocol confirmed it would sunset operations following a costly oracle exploit. The decision comes just days after attackers manipulated price data from Switchboard, an oracle provider used across several Move-based blockchains, to siphon funds from vaults. 

The same underlying flaw also hit Virtue Protocol, making this one of the more consequential oracle-security incidents to affect the Sui and IOTA ecosystems this year.

At a Glance

• Full Sail, a DeFi protocol built on the Sui network, is shutting down and winding down operations in an orderly manner.

• An attacker exploited a signing-key vulnerability in the Switchboard oracle on August 29, draining roughly $91,000 from three vaults.

• The same Switchboard-related exploit caused Virtue Protocol to lose about $455,000 through fabricated-price liquidations.

• The DeFi protocol will use its own protocol liquidity and team funds to fully repay affected depositors; Switchboard has not committed to compensation, and Mysten Labs declined to provide financial support.

• Withdrawal and claims instructions are expected within the next few days.

Full Sail Announces Shutdown After Switchboard Oracle Exploit

On August 29, an attacker removed close to $91,000 from three vaults after gaining control over how oracle price updates were authorized. Direct liquidity pool positions were reportedly untouched. 

Once it confirmed the breach, it paused the affected products and began investigating. The team has now decided that an orderly exit is the safest path forward for remaining users and protocol funds.

Source: Full Sail X Post

How the Switchboard Oracle Vulnerability Led to the Full Sail Hack

According to Full Sail's account, the root cause traces back to Switchboard's production code, which controlled who was authorized to sign oracle price updates. The attacker reportedly inserted a key they controlled into a live oracle feed. 

From there, they pushed reported prices to roughly 100 times below actual market value, deposited into vaults at those distorted rates, restored prices to normal, and then withdrew far more than they had put in. It has been clear that this was not a compromise of its own administrative keys, the failure originated upstream, inside Switchboard's infrastructure.

Source: X Thread

Full Sail Hack Losses Compared With Virtue Protocol Impact

The comparison shows the Full Sail crypto hack news was not an isolated event but part of a broader Oracle failure that rippled across multiple protocols relying on Switchboard's price feeds.

Full Sail Shutdown: Team Promises Full Compensation to Depositors

It will draw on its own protocol-owned liquidity and team treasury to cover the shortfall, with community depositors compensated ahead of everything else. 

New deposits and LP reward claims have already been disabled, and vaults remain paused while final safety checks are completed. The team expects regular pools to move into withdraw-only mode shortly, with detailed withdrawal and claims guidance to follow within days.

Source: Virtue X Post

Switchboard and Mysten Labs Face Questions Over Support

As of September 1,  Switchboard had not shared the technical specifics of how its code failed, the total scope of affected users, or any fix preventing a repeat. No compensation pledge has come from Switchboard either. 

It also approached Mysten Labs, the organization behind the Sui network, for financial assistance, but that request was turned down. It has stated that the absence of this information will not hold up withdrawals or repayments to its users.

Virtue Protocol Reports $455K Losses From the Same Oracle Incident

Virtue Protocol disclosed that 45 users were liquidated after an attacker gained control of oracle signing keys on Switchboard's IOTA deployment, manipulating prices in both directions to mint debt and then trigger liquidations. 

Roughly $455,103 in debt was cleared through those liquidations. Virtue has clarified that its liquidation bot functioned correctly based on the false prices it received and was not itself compromised. 

The protocol has since frozen borrowing, deposits, withdrawals, liquidations, and flash loans while remediation continues.

Full Sail Shutdown Timeline: From August 29 Exploit to September 2 Wind Down

• Aug 28–29: Switchboard-related oracle compromise affects multiple chains; Virtue reports manipulated IOTA pricing and liquidations.

• Aug 29: It detects the incident and pauses vaults after roughly $91,000 is drained.

• Aug 30: Switchboard issues an initial public statement and advises temporary migration to alternate providers.

• Sept 1: Confirms it still lacks technical disclosure or compensation commitments from Switchboard.

• Sept 2: It formally announces its crypto shutdown on the Sui, prioritizing user repayment.

What Happens Next for Full Sail Users on Sui Network?

Affected users should wait for official withdrawal and claims instructions rather than acting on unverified links. The platform has repeated that it will never ask users for seed phrases or private keys, and that only its verified X account and official website should be trusted for updates. A more detailed incident report, along with the team's broader reasoning for winding down, is expected in the coming days.

Conclusion

The Full Sail crypto shutdown on Sui ecosystem news underscores a growing risk in DeFi: protocols can be financially sound yet still fail because of vulnerabilities in third-party infrastructure they rely on, like oracles. With Virtue facing a similar fallout, the incident is likely to intensify scrutiny of oracle security standards across Move-based chains.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency markets are volatile and carry significant risk. Always conduct your own research before making any financial decisions.