Sui Foundation stays neutral as $162m hack recovery goes to vote

The Sui Foundation has announced it will abstain from an upcoming community vote on recovering $162 million in frozen funds from the recent Cetus protocol hack.

The decision comes as the blockchain network prepares for an on-chain governance vote to decide whether to implement a protocol upgrade for fund recovery.

Following Wednesday’s action by Sui (SUI) validators to freeze stolen assets, Cetus has formally requested community approval for a protocol upgrade that would return the locked funds without reversing transaction history or rolling back the blockchain.

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Sui validators coordinated emergency freeze

The Sui validator network responded quickly to the security breach by implementing emergency measures to prevent further asset drainage. Over one-third of validators by stake weight ignored transactions from two addresses believed connected to the attack. This effectively immobilized approximately $162 million worth of digital assets.

On Wednesday, the Sui validator community acted quickly to freeze $162M of the stolen funds. Here’s how that happened:

– Each validator has a configuration file that allows it to ignore transactions from a specific address.

– Adding addresses to this file is at the discretion… https://t.co/pVLTItN0MH

— Sui (@SuiNetwork) May 23, 2025

The freezing mechanism operates through individual validator configuration files that allow nodes to exclude specific addresses from transaction processing. Each validator maintains discretionary control over this function, which can be activated or reversed independently based on individual risk assessments or compliance requirements.

While validators successfully prevented the attacker from bridging a substantial portion of the stolen funds off the Sui network, approximately $60 million in assets had already been moved before the freeze took effect. Cetus has mentioned it is collaborating with Inca Digital, security firms, and international law enforcement agencies to recover the remaining compromised funds.

The Sui Foundation shared two conditions for supporting the community vote process. First, the foundation will maintain complete neutrality regarding the outcome. They stressed its role as a facilitator rather than a decision-maker for community governance. Second, Cetus must publicly commit to deploying all available financial resources toward full customer restitution.

“This is an extraordinary request in response to extraordinary need – Cetus’s customer funds are at stake,” the Sui Foundation stated. Cetus has expressed willingness to respect whatever decision emerges from the community vote.

They noted that “no one can make this decision unilaterally.” The protocol upgrade vote will involve major network participants, including validators and SUI token stakers. Cetus had also offered a $6 million bounty to the hacker to retrieve the funds.

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