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Sui validators approved a vote to recover $162M from the Cetus DEX exploit.
Funds will be transferred via a secure multisig wallet managed by Sui, Cetus, and OtterSec.
Cetus aims to fully reimburse users with support from the Sui Foundation and treasury reserves.
Following one of the largest DeFi exploits of the year, the Sui blockchain and its community have quickly come together to recover user funds stolen from the Cetus decentralized exchange. What initially started as a devastating attack is now evolving into a case study on how effective on-chain governance and prompt action from validators can potentially reverse a significant crypto breach.
In a significant step toward user restitution, SUI validators have approved a proposal to recover $162 million in frozen funds from the recent Cetus decentralized exchange (DEX) exploit.
The decision was made through a governance vote initiated on May 27, which sought community consent to execute a special transaction that would transfer the funds from the attacker’s wallets into a secure multisignature wallet managed by Cetus, the Sui Foundation, and blockchain security firm OtterSec.
Also Read: Sui-Based Cetus DEX Restores $160M in User Assets Following Smart Contract Breach
On May 22, Cetus was hit by a sophisticated exploit involving fake tokens that manipulated its price feed mechanisms. The attack drained roughly $223 million from the platform, with $60 million quickly routed to the Ethereum network.
Thanks to swift action by Sui validators, $162 million of the stolen funds were frozen before they could be moved off-chain.
To determine the fate of the frozen funds, Cetus requested a formal community vote titled: "Whether to Return Stolen Assets of the Cetus Protocol Through a Special Transaction." This vote, open until June 3, allowed SUI token holders to delegate their voting power to validators, who in turn cast votes on behalf of the community.
According to the most recent data, over 55.4% of validators voted in favor of the recovery proposal, while approximately 44.6% had yet to vote. With a majority of support reached and voter participation exceeding the quorum requirements, the proposal has officially passed.
“If the community vote is approved, the funds will be recovered from the attacker and held in a multisig trust account until they can be returned to accounts that had positions in Cetus,” Sui stated on X.
If fully implemented in an upcoming Sui network upgrade, the recovery plan would authorize two hard-coded transactions, each allowing the attacker’s wallets to execute a single transfer, directly moving the frozen funds into a secure multisig wallet. This setup ensures transparency and shared oversight before redistribution begins.
The funds will be co-managed by Cetus, the Sui Foundation, and OtterSec, providing multiple layers of verification and control.
To ensure 100% reimbursement for affected users, Cetus is combining the recovery of frozen assets with internal treasury resources and has requested an emergency loan from the Sui Foundation.
In a statement on May 27, Cetus confirmed that, should the vote pass, all affected positions will be fully refunded. “This includes a critical loan from the Sui Foundation, making a 100% recovery for all affected users possible,” Cetus stated on X.
While the community largely celebrated the rapid response and transparency of the governance process, the incident reignited discussions about the risks of centralization. Critics argued that Sui validators having the power to freeze funds undermines the decentralized ethos of blockchain. Others, however, applauded the swift action as a pragmatic defense against exploits in DeFi protocols.
The vote also sparked a 7% price increase in the SUI token, signaling short-term confidence in the network’s governance and response capabilities. As of the time of writing, SUI is trading at $3.69.
With the proposal passed, all eyes now turn to the technical execution of the recovery and the publication of a detailed refund plan by Cetus. The community awaits the official movement of funds to the multisig wallet, which will mark the beginning of the user refund process.
This case may set a precedent for community-led recovery in DeFi, combining rapid response, transparency, and governance to spark ongoing dialogue about how decentralized ecosystems can manage emergencies.
Also Read: SUI Price Analysis: How Far Will it Go?
