Cetus relaunches with recovery plan after $220M hack.
Following a significant cyber attack that resulted in more than $220 million in digital assets being drained, Cetus Protocol is now fully operational again. The decentralised finance platform, which runs on the Sui blockchain, has resumed services with a strong recovery plan. The relaunch includes restored liquidity of 85% to 99% in affected pools, a $30 million emergency loan from the Sui Foundation, and a 15% CETUS token allocation dedicated to compensating impacted users.
Image 1: Cetus (Source: Medium)
The Breach and Immediate Reaction
Just over two weeks ago, Cetus experienced a major attack targeting its concentrated liquidity pools. A flaw in a shared open-source library used in CLMM (Concentrated Liquidity Market Maker) operations was exploited, leading to the loss of a substantial amount of tokens and throwing pool prices out of alignment.
Cetus’ engineering lead, Wei Song, explained that the exploited bug was not unique to Cetus but existed in external code widely used across DeFi protocols. Once the vulnerability was identified, the team acted swiftly, implementing a fix and coordinating with validators on the Sui network to freeze and later recover a portion of the stolen funds.
An on-chain vote involving Sui community members successfully returned some of the drained assets, allowing Cetus to begin rebuilding affected pools.
Liquidity Restoration and Financial Support
As of now, all core Cetus functions — including token swapping, liquidity provisioning, position management, and reward collection — have resumed.
Co-founder Daniel Huang confirmed that the restoration efforts brought most liquidity pools back to between 85% and 99% of pre-attack levels. This recovery was made possible through several sources. First, $7 million from Cetus’ treasury was deployed to buy back essential assets like SUI, WAL, USDY, and others through market purchases and swaps.
In addition, a $30 million loan was secured from the Sui Foundation, designated specifically for rebuilding pool liquidity and maintaining ecosystem trust. This funding, combined with the recovered assets, helped Cetus successfully rebalance its token reserves and prepare for relaunch.
All user liquidity positions in unaffected pools remain unchanged, while those in compromised pools have been largely restored. Users can now access their positions as before.
CETUS Compensation Programme
To cover remaining losses, Cetus has initiated a user compensation program using 15% of its total CETUS token supply. The allocation includes all unvested tokens originally reserved for the project team, with the goal of ensuring users receive fair value for the temporary shortfalls.
The plan is being rolled out in two parts:
- 5% of the CETUS tokens are already available for affected users to claim as of June 8.
- The remaining 10% will be gradually released over the next 12 months, with monthly unlocks starting from June 10.
Daniel Huang noted that this approach avoids increasing the total CETUS supply, maintaining the token’s economic integrity. The redistribution plan has been submitted to major crypto data platforms like CoinMarketCap and CoinGecko for public reference.
Users with affected liquidity positions will retain their original LP (liquidity provider) NFTs. These tokens now also serve as proof of eligibility for compensation and will not be burned, even if the underlying liquidity is later withdrawn.
Image 2: (Source: Cryptonews)
Hacker Pursuit and Future Planning
While the platform is operational once again, efforts to track down the attacker are ongoing. Cetus has launched legal actions in various jurisdictions, with assistance from law enforcement agencies. The hacker declined an earlier offer to return the funds under whitehat terms and has since tried to move the assets across networks.
Read Also: Cetus Sets Path for Full Recovery After Major DeFi Breach on Sui Network
Technical lead Wei Song indicated that ongoing investigations may result in additional recoveries. Should more funds be retrieved, they will be used to either offer affected users a USDC payout in exchange for CETUS, or repay remaining loan balances to the Sui Foundation. If these options are no longer viable when funds are recovered, Cetus will conduct CETUS token buybacks and deposit them into the community treasury.
Looking forward, Cetus plans to enhance its protocol security by implementing more robust monitoring systems, tightening rate limits on asset flows, and commissioning additional code audits. The team also aims to fully open-source the protocol and launch a new whitehat rewards initiative to encourage ethical vulnerability reporting.
1st stage — back to the TOP 10 DEX list of all chains by daily trading volume. #Cetus pic.twitter.com/jmLLOwUEN0
— Cetus (@CetusProtocol) June 9, 2025
In a major win for the team, Cetus has already seen strong user engagement since its relaunch. According to a post from the project’s official X account, Cetus re-entered the list of the top 10 decentralised exchanges by daily trading volume across all blockchains within just hours of coming back online.
