SUI community votes ‘Yes’ on unlocking hacker’s funds to compensate Cetus traders

The SUI community showed immediate readiness to reclaim over $160M locked in a blacklisted hacker address. The funds would be used to compensate for the lost liquidity on Cetus Protocol

The SUI network community took another step toward making whole the traders and liquidity providers of the hacked Cetus Protocol DEX. The vote was initially open for seven days, though an early decision may arrive in the next two days if the trend remains

As usual, SUI stakers must delegate to their preferred validators. The SUI Foundation will abstain from the vote, as it would sway the result through its extensive token holdings. Voting can end within two days, as soon as the majority of the supply is staked in favor. In the initial hours of the vote, only the Stakefish validator voted ‘No’.

In the newly opened vote, over 54% were in favor of creating a special transaction to move the funds from the hacker’s addresses into a new multisig wallet. To compensate its community, Cetus Protocol will be given back control of the new wallet. The votes continued to accumulate in favor of the fund release

SUI validators quickly voted in favor of the proposal to take back funds from the hacker wallets in specially approved transactions. | Source: SUI Voting

The vote was a key step in making Cetus DEX whole, and followed a decision to deploy reserves to compensate for all the funds that were bridged to Ethereum, where they could be harder to trace. The total losses from the hack were $223M, of which Cetus Protocol and the SUI Foundation would compensate for all the tokens that were bridged out of SUI and into Ethereum

SUI community supports the clawing back of hacked funds

The blacklisting of the SUI wallets meant the hacker could not send out a transaction, as it would be intercepted and refused by validators. Blacklisting addresses is not a novelty, though it rarely happens at the level of validators

SUI sets a precedent by coordinating quickly to vote on a proposal, giving the market greater clarity. The vote was initiated just hours after Cetus Protocol announced its recovery and compensation program.

If the vote passes, SUI will issue a protocol-level upgrade, which will enable a one-time authentication of two special transactions. Those transactions will target the two wallets where the funds from the exploit were held

The SUI upgrade will be hard-coded with the two attacker addresses, the exact tokens stolen, and the destination addresses. Once the community fully approves the change, the vote result will signal the launch of the transaction

Several key holders, including Cetus Protocol, the SUI Foundation, and OtterSec, will control the new wallets.

SUI and CETUS continue their recovery

Following the recent exploit, CETUS continued its recovery, rising to $0.16 in the past day

SUI regained its positions to $3.72, though with lower trading volumes. SUI expected a bigger breakout just before the hack, with bets on Polymarket suggesting a hike to $5 by the end of the month

Both protocols had near-peak activity and value locked, as SUI was trying to follow the path of Solana. SUI carries over $1B in USDC stablecoins, with a total of $1.7B in value locked. Cetus still retains only $35M in liquidity, after the majority of its vaults were drained.

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