Cetus Hack Update: Sui Foundation To Back Full User Loss Recovery Plan

The Cetus hack on the Sui blockchain resulted in a loss of $223 million after hackers exploited a security flaw in the protocol’s smart contract code.

Following this breach, the Sui Foundation announced it would provide a secured loan to Cetus, enabling the protocol to fully compensate users affected by the stolen funds. This loan forms part of a larger recovery strategy aimed at covering losses that Cetus could not handle alone.

Sui Foundation to Support Cetus Hack Recovery

The Sui Foundation’s loan is designed to help Cetus cover the stolen assets that have been bridged off the Sui blockchain. Cetus will combine these loan proceeds with its treasury funds to cover the total loss caused by the hack.

According to a recent post on X by Cetus, this loan is a crucial step to enable a 100% recovery for users affected by the Cetus hack, assuming the locked funds can be recovered through an upcoming community vote. The loan provided by the Sui Foundation is specifically for assets that were bridged out of the Sui network and is separate from the frozen funds held by validators.

The foundation emphasized that this measure, along with the community vote, creates a path toward full user compensation. The Foundation stated, “These are extraordinary measures taken to protect the Sui community,” and confirmed their continued support for members affected by the Cetus hack incident.

Impact of the Cetus Hack on the Sui Ecosystem

The Cetus hack occurred due to a hidden error in a piece of open-source code used by Cetus in its smart contracts. This flaw weakened the platform’s security and allowed hackers to steal $223 million. After the breach, Cetus and Sui network validators acted quickly to halt further unauthorized transactions by blocking those signed by the attacker’s address.

Despite these efforts, Cetus hackers managed to convert about $60 million into other assets and withdraw these from the blockchain, making full recovery difficult. In response, Cetus offered a $6 million reward for information leading to the recovery of stolen funds.

However, after the announcement of the Sui Foundation’s loan and recovery plan, the Cetus token (CETUS) price rose 16.69%, reaching $0.1518. The SUI token also increased by 5.45%, trading at $3.67 as of press time.

Community Reaction and Recovery Efforts

The Cetus hack has led to mixed reactions within the crypto community. Some users praised Cetus for their quick response and efforts to address the situation. Others criticized the firm for what they consider inadequate communication and compensation measures.

The freezing of funds by Sui validators also sparked debate around decentralization, as some community members viewed this as a centralized action contrary to blockchain principles.

Cetus acknowledged the mistake in their code and expressed regret for the impact on users and the broader ecosystem. The company stressed its commitment to security improvements and promised to implement stricter checks and monitoring in the future. Cetus’s recent statement said,

“Your trust is our top priority, and we are fully committed to making things right.”

Next Steps for Cetus Hack Full Recovery

The success of the recovery plan relies heavily on the outcome of the upcoming community vote, which will decide the fate of the frozen assets.

Cetus urged the Sui community to support the vote to enable full compensation of affected users. They confirmed that regardless of the vote’s result, recovery efforts will begin immediately, with detailed plans forthcoming.