Sui DEX Cetus hit by suspected hack: Over $200M in potential losses

Sui DEX Cetus Suffers Suspected $200M Exploit

The world of decentralized finance (DeFi) experienced another jolt this week as Cetus, a decentralized exchange (DEX) built on the Sui blockchain, became the target of a significant exploit. Initial reports suggest potential losses exceeding $200 million in digital assets. The incident has raised concerns about security within the Sui ecosystem and the broader DeFi space.

Details of the Suspected Exploit

According to pseudonymous Web3 researcher COMDARE3, users reported the exploit on X (formerly Twitter). Data from DEX Screener indicated a sharp decline in the value of numerous assets listed on Cetus over a 24-hour period. This sparked immediate concern and prompted further investigation.

Hacken, a crypto cybersecurity company, through their onchain monitoring tool Extractor, confirmed that at least $63 million had been bridged to Ethereum. A substantial amount, 20,000 ETH, was then transferred to a newly created wallet. A Hacken representative confirmed these findings, highlighting the rapid movement of funds out of the Cetus ecosystem.

Cetus and Sui Respond

Cetus pool data revealed a massive surge in transaction volume on May 22, reaching $2.9 billion, a significant jump from the $320 million recorded the previous day. This unusual activity likely reflects funds being rapidly withdrawn from the protocol.

A Cetus representative acknowledged the incident, stating that approximately $223 million was stolen, with $162 million of those funds successfully frozen. The team is collaborating with the Sui Foundation and other ecosystem participants to explore solutions for recovering the remaining stolen assets.

A Sui representative stated that Cetus is working with other DeFi protocols, the Sui Foundation, and network validators to protect the ecosystem. Validators have identified the addresses containing the stolen funds and are currently ignoring transactions from those addresses.

Market Impact

The impact on certain tokens within the Cetus exchange has been severe. Lombard Staked BTC (LBTC) and AXOLcoin (AXOL) experienced significant value drops. Data shows the top 15 losers on the platform all suffered losses exceeding 75% of their price.

Scallop, a Sui-based money market, has temporarily suspended all borrowing activities on its platform as a precautionary measure. They assured users that funds are safe and promised further updates regarding the resumption of operations.

Outside of Cetus, LBTC has shown some recovery, gaining over 4% in value. However, Axol (AXOL) has not fared as well, experiencing a loss of nearly 99.5%, according to CoinMarketCap data.

The alleged exploiter’s address currently holds a substantial amount of assets, including nearly $52 million in Sui (SUI) tokens, $4.9 million of Haedal Staked SUI (HASUI), over $19.5 million of Toilet (TOILET), nearly $19.5 million of wrapped USDt (USDT), and various other assets.

Cetus confirmed the incident on their official X profile, stating that the smart contract has been paused for safety and that an investigation is underway.

Concerns Over Transparency

Blockchain analysts and compliance firms have voiced concerns regarding the project’s transparency. AMLBot noted the rapid bridging of $212 million to Ethereum, occurring at a rate of $1 million per minute.

“We’re seeing $212 million being bridged to Ethereum at a rate of $1 million per minute.”

As reported by Cointelegraph, the Cetus exploit highlights the ongoing risks within the DeFi space. While protocols are working to enhance security measures, incidents like these underscore the importance of vigilance and caution for users.