Cetus Protocol’s $223 Million Hack Puts Sui’s Decentralization in the Spotlight

While some of Cetus Protocol’s funds exited the Sui network via bridges to Ethereum, $162 million remains frozen in the network due to the joint action of validators. The actions stemming from this hack have affected the crypto community’s perception of Sui and its levels of decentralization.

Sui Validators Freeze Cetus Protocols Hacked Funds, Decentralization Under Scrutiny

On May 22, Cetus Protocol, a decentralized finance platform part of the Sui network, reported losing over $200 million in user funds after an unknown attacker exploited its platform.

The aftermath of this attack, still not detailed by the protocol due to the ongoing conversations with the Sui Foundation and other community members to determine what will be done to recover these funds, has awakened concerns about the true decentralization of the network.

While Cetus acknowledged that over $60 million was bridged to Ethereum through different platforms, there are still $162 million frozen in Sui addresses as a result of a joint effort of the network validators.

This has been criticized by the wider crypto community, which states this is a clear sign that the network is centralized, unlike other alternatives like Ethereum. Cybercapital’s Justin Bons stated that while he considered this was the right thing to do, the problem is that it was possible to do it in the first place.

In the same vein, Metalex Labs Founder Gabriel Shapiro blasted the course of action, comparing Sui to Ethereum.

He stated:

Remember, every smart contract chain other than Ethereum is just an enterprise blockchain

In a recent post, Cetus explained that they are pursuing two different avenues to solve this incident. The first involves invoking an onchain vote to authorize a recovery of the already frozen funds, while the second encompasses offering a reward for the hacker to return the funds or initiating legal action against him.

“We want to ensure that once an announcement is made, it reflects a clear, coordinated, and actionable plan — not one made prematurely,” Cetus concluded, stressing that they are studying the options to fully return the funds to the users affected.

Read more: $1.5 Trillion Asset Manager Franklin Templeton Backs Sui Blockchain Expansion