tl;dr
The Sui blockchain faces criticism after supporting a proposal from DeFi platform Cetus Protocol to recover $162 million in frozen assets following a $223 million hack. Over a third of Sui validators froze transactions from wallets tied to the attacker. Cetus offered a $6 million bounty to recover f...
The Sui blockchain has come under intense scrutiny for backing a controversial proposal by DeFi platform Cetus Protocol to recover $162 million in frozen assets following a massive $223 million hack. After the breach, over one-third of Sui validators froze transactions from wallets linked to the hacker, effectively immobilizing a portion of the stolen funds.
Cetus Protocol’s response includes a $6 million bounty offer to the hacker for returning the remaining assets. However, this offer has been met with widespread criticism for being far too low and insufficient to cover the painstaking investigative efforts required. Experts warn that such bounties rarely offset the high upfront costs of tracking down cybercriminals, which can involve intelligence coordination, law enforcement collaboration, and complex evidence collection.
The proposal to implement a protocol upgrade aims to return the frozen funds without rolling back or altering past transactions, preserving blockchain history. This approach spurred fierce debate among the community, as many argue it threatens the core principles of decentralization and blockchain immutability. Critics caution that even freezing smart contracts and censoring transactions can undermine the foundational trust in blockchain technology.
Amidst this controversy, the Sui Foundation has remained cautiously neutral. It has announced support for an on-chain vote to decide on the proposed upgrade but declined to participate directly. Furthermore, the foundation urges Cetus Protocol to exhaust all available financial means to compensate the affected users fully. Alongside, the foundation itself offered a $5 million bounty to identify the hacker, a move critics labeled as vague and inadequate given the complexity of such investigations.
Blockchain security experts highlight the uncertain and often prohibitively expensive nature of hacker tracking. Yu Xian, co-founder of SlowMist, emphasized that without upfront funding and deep cooperation across multiple fronts—including threat intelligence, communications with victims, and law enforcement—investigations are unlikely to progress meaningfully.
The unfolding situation underscores a broader tension in the crypto space: balancing swift remedial action to protect users against adherence to immutable, decentralized blockchain ethos. As the Sui community grapples with this dilemma, the story raises pressing questions about governance, security incentives, and the resilience of blockchain frameworks under attack.