Cetus Protocol Exploit Halts Operations, Triggers $223M Loss and Sui Token Selloff

On May 26, 2025, the SUI/USDT 4-hour chart formed a bullish flag pattern. A bullish flag appears when a sharp upward move is followed by a downward-sloping channel

May 26, 2025 - A bullish flag pattern has formed on the SUI/USDT 4-hour chart. A bullish flag appears when a sharp upward move is followed by a downward-sloping channel, typically signaling the potential continuation of the prior uptrend.

If this bullish flag confirms, the price of SUI could rally by 41% from the current level of $3.56 to the projected target of $5.02. The breakout target is based on the height of the previous flagpole, measured from the bottom of the initial rally to the start of consolidation.

Meanwhile, the Relative Strength Index (RSI), a momentum indicator, reads 41.03, which remains below the neutral 50 level. This suggests the token is not overbought, and there is room for upward movement.

At the same time, the 50-period Exponential Moving Average (EMA), currently at $3.72, acts as dynamic resistance. A close above this EMA and the upper red trendline would validate the breakout signal.

Volume has remained relatively steady, but a confirmed breakout should come with a strong spike in buying volume to support the move. If volume stays low, the pattern could fail or delay the breakout.

In summary, the chart setup indicates a possible bullish breakout toward $5.02 if SUI breaks out above the flag’s resistance line with strong confirmation.Cetus Protocol, a decentralized exchange (DEX) on the Sui Network, has suspended smart contract operations following a major exploit.

The exploit, which occurred on May 22, 2025, involved oracle manipulation and resulted in an estimated $223 million loss, leading to a sharp drop in token prices across the Sui ecosystem.

In a statement, Cetus confirmed the breach and disclosed that the attacker stole approximately $223M. The team immediately acted to pause the smart contract, successfully freezing $162M of the compromised funds.

“We have confirmed that an attacker has stolen approximately $223M from Cetus Protocol,” the team stated.

“We took immediate action to lock our contract preventing further theft of funds. We are working with the Sui Foundation and other ecosystem members to recover the remaining stolen funds.”

The exploit appears to have stemmed from a vulnerability in Cetus Protocol’s internal pricing mechanism. The team initially denied a hack, posting on Discord that the platform “detected a bug in the oracle.”

However, blockchain analytics firm Lookonchain reported that the attacker drained over $260 million in assets, most of which were swapped into USDC and bridged to Ethereum. Approximately $60 million in USDC had already been transferred at the time of reporting.

Alex Horlan, CTO at HackenProof, explained that the attacker used low-liquidity injections to manipulate pool states, enabling them to extract SUI and USDC without providing real value. He pointed to possible flaws in key functions that handle token ratios and rounding.

Cetus Protocol runs a dual oracle model. It uses internal on-chain oracles derived from concentrated liquidity pools and also integrates with the decentralized oracle service Pyth Network. These systems are meant to reduce off-chain dependencies and price manipulation risks.

However, it remains unclear whether the vulnerability originated in Cetus’s internal pricing logic or in the external oracle feed. As of now, Pyth Network has not issued a statement.

The exploit significantly impacted the broader Sui ecosystem. According to DeFiLlama, Cetus’s TVL fell over $200 million, now sitting near $75 million. Cetus’s native token, CETUS, dropped 24% to $0.15.

Seven of 11 Sui-based tokens tracked by CryptoSlate also registered losses of at least 5%. Despite the broader selloff, the SUI token itself only showed a slight decline.

Rosco Kalis, founder of Revoke Cash, noted that most of the stolen funds belonged to liquidity providers.

“This also caused a lot of SUI token prices to crash, affected normal users as well,” he said.

While investigations continue, the broader crypto community has begun offering support. Former Binance CEO Changpeng Zhao said his team had reached out to help Cetus recover.

Cetus has not yet shared a recovery plan. Further updates are expected once the investigation progresses.Jackson.io, a decentralized Web3 gaming protocol operating on the Sui blockchain, has launched its Beta platform.

The platform, focused on a points system and a Sharkz NFT campaign, marks the next stage of Jackson.io’s development. It follows a $10 million Seed Round funding earlier this year.

The investment, led by SSSSSSSSS Capital Tokyo, will support the integration of new games and technologies into the Jackson.io ecosystem. Several renowned Web3 funds participated in the round.

Jackson.io introduces a GameFi structure where token stakers receive a