Cetus Protocol Plays White Knight—Offers Deal to Recover Stolen Crypto

In a move that blurs the line between vigilante justice and damage control, Cetus Protocol extends an olive branch—or is it a calculated gambit?—to hackers who drained funds from its platform.

The offer: Return the loot, avoid the handcuffs. No word yet on whether the thieves are biting—or laughing all the way to their offshore accounts.

Another day, another DeFi project learning the hard way that ’code is law’ until someone else’s law comes knocking.

The wallets are mostly blocked and blacklisted from interacting with other ecosystem protocols. The Cetus hack can still mix or use decentralized anonymous protocols to obscure the origin of funds. 

Cetus hack exposes controversial SUI decision to block addresses

In an unprecedented move, the SUI network sent out a patch code to all validators, who are actively ignoring transactions originating from the hacker addresses.

The MOVE was efficient in securing $160M of the funds, which were not yet bridged to Ethereum. 

This also exposed the reality of SUI validators, which were capable of coordinating based on an ad hoc decision. The SUI network is thus not considered censorship-free, in comparison to larger networks like Ethereum and Bitcoin. On the other hand, the fast consensus to block addresses was a solution against the loss of funds. 

SUI validators invoked a governance mechanism in which the decision to block the funds was not actually centralized, but was quickly accepted by all validators. Running a SUI validator node is deliberately expensive, requiring 30M staked SUI. The creation of a validator node either requires an early entry or the gathering of staking deposits from a wide circle of owners. 

SUI validators, however, are incapable of moving the funds from the addresses, requiring the hacker to build a new transaction to the predetermined wallet. 

SUI sinks further after the hack

Since the hack, SUI has endured significant losses. The token is down over 7.5% to $3.87, although no SUI tokens were directly sold to exchanges. 

SUI open interest increased to $963M, with more traders longing the coin in expectation of a recovery. 

The relatively large DeFi hack did not affect the main chain’s operation. However, the SUI meme token market saw significant price anomalies and may take a while to recover. 

Daily active users on SUI fell from over 1.6M to around 360K in the past 24 hours, showing that the DeFi ecosystem was the main driver of adoption. Cetus Protocol had expanded its liquidity by 70% in the past month, as SUI offered a new wave of meme tokens.

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