Cetus Plots Recovery of $162 Million in Hacked Funds

Reading Time: 2 minutes

• Cetus has announced a plan to recover $162 million stolen in a recent hack
• The recovery strategy includes a protocol upgrade that would reclaim tokens frozen after the hack
• The upgrade is part of an overall plan to fully reimburse those affected

Cetus Protocol has outlined a comprehensive recovery plan to address the loss of $223 million through a recent hack, including a protocol upgrade to release frozen funds. $162 million worth of stolen coins were frozen on-chain following the hack, and supporters will soon vote whether to upgrade the network in order to release the coins. The Sui Foundation is providing a loan to have the upgrade carried out, but the community must first agree to the measure.

Digital Forensics: Quick Thinking Led to Asset Freeze

On May 22, Cetus, a decentralized exchange on the Sui blockchain, suffered a substantial exploit due to a flaw in its automated market maker logic. This vulnerability allowed attackers to manipulate liquidity pools, resulting in the theft of approximately $223 million in digital assets. Swift action by the Cetus team and Sui validators led to the freezing of $162 million of the stolen funds, preventing further losses, but this action made them unreachable to all.

To recover the frozen assets, Cetus has initiated a community vote seeking approval for a protocol upgrade. This upgrade would permit the transfer of funds from the attacker’s wallets to a multisignature wallet controlled by Cetus, the Sui Foundation, and blockchain security firm OtterSec. The vote requires over 50% participation and a majority in favor to pass, and as of May 29, it has seen 89 ‘yes’ votes and 2 ‘no’ votes. The vote will close on 3 June.

Digital Forensics: Cetus Committed to Full Reimbursement

Cetus has committed to using its cash and token treasuries, supplemented by a critical loan from the Sui Foundation, to ensure full reimbursement for all affected users. The loan is contingent upon the successful recovery of the frozen funds through the community vote. This financial backing aims to restore user trust and stabilize the platform’s operations.

The incident has sparked discussions about the balance between decentralization and the need for intervention in blockchain governance. While some community members express concerns over centralization risks, others commend the proactive measures taken to secure user assets. In response to the exploit, the Sui Foundation has allocated $10 million to enhance ecosystem security, including audits, bug bounty programs, and formal verification processes.