Sui community votes to release $160M in SUI frozen funds after record $223M hack

The Sui blockchain has taken a landmark step toward recovering SUI frozen funds, approving an on-chain vote to release $160 million in assets frozen after the $223 million Cetus Protocol exploit.

In a decisive move, Sui validators representing 90.9% of the network’s stake voted to transfer the SUI frozen funds into a multisig wallet, marking a critical phase in Cetus’ recovery plan. The hack, which drained liquidity pools on May 22 via a third-party code flaw, saw $162 million frozen on-chain—a rare example of decentralized governance intervening in a crisis.

Recovery plan hinges on SUI frozen funds

The SUI frozen funds will now be held in a trust account, combined with Cetus’ treasury and a Sui Foundation loan to fully reimburse victims. While the exploit originated in Cetus’ code, the Sui network has treated it as a wake-up call, announcing a $10 million security overhaul for ecosystem protocols.

Key actions include:

• Expanding bug bounties for high-value DeFi projects.

• Strengthening protocol-level audits.

• Ensuring SUI frozen funds can be swiftly secured in future incidents.

Debate erupts over decentralization after SUI frozen funds vote

The decision to unlock the SUI frozen funds has sparked mixed reactions. Proponents praise Sui’s transparency, while critics question freezing wallets in a “decentralized” system. The vote included input from both validators and individual stakers, reflecting the network’s layered governance.

However, as at press time, the price of SUI has dropped 5% in the last 24 hours, according to CoinMarketCap.

What’s next for victims?

With the SUI frozen funds now accessible, Cetus will finalize reimbursement timelines. The protocol confirms all users will be repaid, thanks to the recovered assets.

The May 22 attack exploited a price oracle vulnerability in Cetus’ third-party code, draining liquidity pools across 14 trading pairs. Within 47 minutes, Sui validators froze $162 million – the largest-ever intervention of its kind in Layer 1 blockchain history.

“Freezing assets contradicts decentralization principles but saved thousands of users,” said Ethereum co-founder Vitalik Buterin in a May 29 tweet.

Meanwhile, Sui’s price rebounded 8.2% post-vote after an initial 18% crash.