What Does the CETUS Hack Mean for DeFi Security on SUI?

• Hackers drained over $220 million from CETUS DEX, a key SUI-based platform.
• $160 million in stolen funds has been frozen and is set for recovery.
• The hack has raised serious questions about DeFi security and SUI decentralization

Hackers exploited CETUS, a top decentralized exchange on the SUI blockchain, draining over $220 million in assets. The breach on May 22 triggered a sharp 40% drop in the CETUS token. With $160 million frozen and recovery underway, the breach is now a flashpoint for ongoing debates around DeFi security on SUI.

The attack on CETUS DEX began when a hacker withdrew liquidity from its pool, exploiting a vulnerability in the platform’s smart contract. The breach led to a sharp price plunge, as CETUS fell from a daily high of $0.24563 to about $0.17174, impacting CETUS holders.

Related: SUI/Cetus Hack Update: $160 Million Of Over $220 Million Stolen Crypto Is Now Frozen

Data from TradingView shows CETUS had gained approximately 16% earlier that day before crashing post-exploit. The sudden reversal spurred fears among traders and DeFi users, particularly those engaged in liquidity farming on the platform.

CETUS DEX Hit: Hacker Drains $220M+, $160M Swiftly Frozen

Following the exploit, a Chief Product Officer confirmed that $160 million of the stolen funds had been frozen and were expected to be returned to the protocol. While this recovery is a major relief, over $60 million remains unaccounted for. 

Notably, CETUS is a major player in the SUI ecosystem. Its breach sent ripples across other projects, including HIPPO, which issued a statement promising support and possible token buybacks. Before that, Hippo slumped 81% after the incident, and Lofi slumped by 76%.

This hack underscores a common issue: DeFi platforms remain attractive targets for exploits, especially during high market activity. Poorly secured smart contracts and complex liquidity mechanisms leave gaps that sophisticated attackers can exploit.

The CETUS exploit is not an isolated incident. It fits a pattern of increasing attacks on DeFi protocols, where total value locked (TVL) often outpaces the maturity of their security architecture. For SUI, which has seen growing adoption, the incident acts as a wake-up call.

Is SUI’s DeFi Infrastructure Truly Decentralized and Secure?

X user Loonies criticizes SUI’s response to the CETUS hack, arguing that the ability to unilaterally freeze wallets undermines the core principle of decentralization. 

According to him, blockchains that can override code act more like fintech platforms than trustless networks. He claims SUI’s actions reveal a system driven by marketing rather than actual decentralized values.

However, DeFi enthusiast Cassie defends SUI’s decision to freeze stolen funds after the CETUS hack, calling it necessary to protect users. She highlights how major chains like Ethereum, Solana, and Bitcoin have all intervened during major exploits. To her, stopping hackers isn’t centralization but responsible security.

Related: SEC Hits Unicoin, Top Leaders with Lawsuit Alleging $100M+ Crypto Fraud

Exploit Details Emerge: Overflow Vulnerability, Forensic Challenges on SUI

As the debate continues, preliminary findings on the attack vector are surfacing. Lei Wu noted that the Sui ecosystem lacks advanced forensic tools, making it hard to trace transactions or analyze the attack in depth. 

Preliminary findings suggest the hacker exploited an overflow vulnerability in the add_liquidity() function, using a single token to inject excessive liquidity and manipulate the pool for profit.