The decentralized exchange Cetus Protocol experienced a major security breach on May 22, 2025, resulting in the theft of nearly $260 million from its liquidity pools on the Sui Network. Hackers exploited vulnerabilities in the network's smart contract design and price oracle mechanisms, manipulating token prices and draining funds, particularly targeting liquidity pools such as the SUI/USDC pair.
This incident is among the largest DeFi hacks of 2025 and has had immediate severe effects on both the protocol and the wider Sui ecosystem. In response, Sui Network validators swiftly froze $162 million of the stolen assets to prevent further losses, a move that has sparked debate in the community regarding decentralization principles versus emergency intervention.
The attack caused the SUI token price to plunge approximately 14%, falling from $4.19 to $3.62 within 24 hours, while Cetus Protocol's native token CETUS dropped from $0.26 to $0.15. The exploit damaged investor confidence in the protocol's security and raised concerns about Sui's robustness and reputation as a secure blockchain platform.
Following the incident, Cetus Protocol suspended operations, patched the vulnerability, and initiated efforts to recover stolen funds, including offering a $6 million bounty and negotiating a potential whitehat settlement with the hacker. Collaboration among the Sui Foundation, law enforcement, and anti-cybercrime experts is ongoing to mitigate the damage.
Interestingly, the swift freezing of funds and transparent communication has helped restore some trust within the community. SUI has recently seen price and open interest increases amid hopes for a successful recovery. Analysts emphasize the need for stronger DeFi security practices, especially enhancing oracle mechanisms and liquidity pool designs, to prevent similar attacks in the future.