Cetus Protocol hack triggers widespread panic across Sui ecosystem

The Sui blockchain is reeling after Cetus Protocol, one of its core decentralised exchanges, suffered a massive exploit that drained more than $200 million in liquidity, shaking user confidence and igniting fear across the DeFi sector. The incident, first reported by pseudonymous Web3 researcher COMDARE3, was quickly confirmed by a dramatic spike in trading volume and an abrupt collapse in token prices across the platform. Hacker gained control of all SUI-denominated liquidity pools While the Cetus team initially downplayed the incident as a “bug,” on-chain analysts and compliance firms have sounded alarms, pointing to rapid and suspicious fund outflows that indicate a coordinated exploit. Although the exact method used by the attacker has not yet been confirmed, early investigations suggest that the exploiter gained control of all SUI-denominated liquidity pools, allowing them to siphon off assets at an unprecedented pace. Shortly after the anomaly was detected, Cetus announced that it had paused its smart contracts in a bid to contain the damage and investigate the breach, but the move came too late to prevent widespread asset losses. Cetus🐳 @CetusProtocol · Follow 🚨Alert Announcement 🚨There was an incident detected on our protocol and our smart contract has been paused temporarily for safety. The team is investigating the incident at the moment. A further investigation statement will be made soon. We are grateful for your patience. 2:34 PM · May 22, 2025 150 Reply Copy link Read 47 replies Data from blockchain analytics firm Onchain Lens shows that tens of millions of dollars in stablecoins and native assets were rapidly bridged to Ethereum, with one AMLBot representative noting that transfers occurred at a staggering rate of approximately $1 million per minute. Onchain Lens @OnchainLens · Follow Cetus ( @CetusProtocol ), the leading DEX and primary liquidity provider on $SUI , has reportedly been hacked.The attacker gained control of all SUI-denominated pools, exploiting over $200M, and has also started moving $USDC . suiscan.xyz/mainnet/accoun… 2:29 PM · May 22, 2025 29 Reply Copy link Read 9 replies This wave of outflows caused a near-total collapse in several token values, with assets such as Lombard Staked BTC (LBTC) and AXOLcoin (AXOL) dropping nearly 100% in price on Cetus. Outside the Cetus platform, some of these tokens showed signs of recovery, but the damage to investor sentiment remained evident across the broader Sui ecosystem. Despite the Cetus team’s reluctance to label the incident as a hack, market data from DEX Screener and independent investigators paint a clear picture of a targeted attack that drained liquidity pools and disrupted all major trading activity. At the peak of the incident, Cetus recorded over $2.9 billion in processed transactions, an 89% increase from the day before, suggesting that panic-driven exits and exploit-related movements accounted for the bulk of the activity. Swapping functionalities on the platform have ceased completely, and the protocol’s liquidity has collapsed, leaving token pairs effectively frozen and users unable to exit their positions. The Sui Foundation has confirmed that it is working closely with Cetus developers to determine the scope of the exploit and develop a response strategy, though no clear remediation plan has been announced so far. Sui @SuiNetwork · Follow At 3:52 AM PT, we became aware of an incident concerning Cetus. The Cetus team has our active support in this ongoing investigation and will provide further updates as soon as they become available. 3:24 PM · May 22, 2025 1.4K Reply Copy link Read 288 replies Cetus hack a blow to Sui Notably, the Cetus Protocol hack marks a significant blow to Sui’s DeFi ambitions, especially at a time when the ecosystem was gaining traction for its scalability and performance. Besides impacting the broader Sui ecosystem, Sui’s native token, SUI, has also seen a sudden drop following the hack. According to Immunefi , Q1 2025 was already the worst quarter in crypto history for security breaches, with over $1.6 billion in losses across 39 incidents, figures now worsened by the Cetus catastrophe. Compliance experts have noted eerie similarities between the Cetus exploit and other large-scale attacks, with some pointing to the potential involvement of advanced threat actors such as North Korea’s Lazarus Group. While nothing has been confirmed regarding attribution, the pace and precision of the exploit indicate it was conducted by highly skilled operators with deep knowledge of the Sui protocol’s internal architecture. As the investigation continues, the incident underscores the growing vulnerabilities within decentralised finance, especially as more liquidity and users flock to new ecosystems like Sui. The fallout from the hack is likely to have long-term implications, not just for Cetus but for trust in emerging DeFi platforms that have yet to establish robust security and governance frameworks. Until a transparent postmortem is provided and user funds are addressed, uncertainty will persist, casting a shadow over Sui’s broader adoption narrative and its future as a reliable blockchain for financial innovation. The post Cetus Protocol hack triggers widespread panic across Sui ecosystem appeared first on Invezz

Source: Invezz