Cetus Protocol, the network’s largest decentralized exchange (DEX) and liquidity provider, has fallen victim to a sophisticated hack that drained approximately $223 million worth of SUI tokens from its SUI/USDC liquidity pool.
The attack, which took place early on Thursday morning, shocked the Sui community, causing the CETUS token prices to plummet by over 75%. It severely disrupted trading activity on the platform, nearly depleting liquidity pools and bringing trading functionality to a complete standstill.
While the SUI token remains relatively stable on centralized exchanges, the decentralized side of the ecosystem is in crisis mode. For instance, some Sui-based memecoins, such as BULLA and MOJO, have experienced catastrophic drops exceeding 90%.
The attack’s impact extends beyond just token prices. USDC on the Sui network reportedly depegged, having traded at fractions of a cent at one point, while liquidity for some trading pairs plummeted to as low as $143,000.
How the Sui Hack Occurred
Blockchain security experts claim the attacker employed a sophisticated strategy to exploit vulnerabilities in Cetus Protocol’s smart contracts. The hacker reportedly exploited vulnerabilities using spoof tokens like BULLA to miscalculate price curves and break reserve mathematics.
The attack followed a specific pattern, beginning with swapping in spoof tokens, adding near-zero liquidity, and repeatedly extracting real assets like SUI and USDC without depositing anything of value.
Cetus Team Response
The Cetus Protocol team confirmed the incident and took immediate action to prevent further damage. The platform has suspended trading functionality while the team assesses the full extent of the damage.
For users of the Sui ecosystem, the immediate advice from security experts is to exercise caution. With the investigation still ongoing and the full extent of the damage being assessed, liquidity providers and traders are advised to avoid interacting with the protocol until official guidance is provided.
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