Happy 15th Bitcoin Pizza Day 🍕

Today's big story:

A single exploiter stole over $200 million from the Sui DeFi protocol Cetus and the chain's core team are now freezing the outflows of stolen funds, co-founder Adeniyi Abiodun announced on X.

The exploiter began minting spoof tokens on Cetus, the network's main DEX and liquidity hub, before dawn on Monday. The single address was able to trick Cetus's math into over-valuing the fake tokens, then drained roughly $223 million in real assets — SUI, USDC and assorted memecoins — in less than an hour.

Investigators say the exploit hinged on the DEX equivalent of counterfeiting poker chips and cashing them in. Cetus slammed the brakes, pausing their smart contracts, which bought the Sui core team time to marshal their own firepower as a “large number of validators” coordinated to ignore transactions of addresses with stolen funds, according to the statement SUI issued on X.

By mid-afternoon, they had succeeded in freezing about $160 million of the loot, and the remaining funds would be sent back to liquidity providers once forensics wrap up, Abiodun promised.

However, the hacker was able to bridge $60 million over to Ethereum, and exchanged USDC for ETH, a testament to the chain's censorship resistance.

Some may argue that's a necessary seat-belt while the network is young; purists will note that “immutable money” with a freeze switch is an oxymoron. Either way, the episode leaves a paper trail that regulators and would-be censors will study closely.

Then there's Move, the language Sui touts as “"incredibly powerful and efficient, yet also incredibly safe." Today's breach isn't the first blemish on that narrative. Aptos' Thala money market lost $25 million last November. But it is by far the largest attack on a Move-based chain, and the first to hit Sui itself.

The takeaway isn't that Move is unsafe but that no language can fix economic design flaws or unchecked privileges.

Sui's official website

And speaking of Aptos, co-founder Mo Shaikh wasted no time in using the exploit as an opportunity to highlight that not all Move-language chains are created equal, and that, according to him — surprise! — Aptos is so much better.

"Aptos has always had a more modular architecture, more secure execution, and a broader vision. The market hasn't priced this in—yet," he tweeted.

Markets wasted no time either. The CETUS token cratered 40% before stabilizing in hopes of recovery. The token was down 19% at the time of writing.

CETUS 24-hour price chart. Source: CoinGecko

Zoom out and the hack lands at an awkward moment for Sui: TVL was climbing and SUI was one of the top performing Layer 1 tokens this past year, surging ~250%, compared with SOL's 0.3%, ADA's 67%, AVAX's -36% and APT's -37%. Meanwhile, developers were trumpeting the Move language's virtues and Sui was angling to pitch itself as the top next-generation chain.

The next few days will test that pitch.

Stay Defiant.

It’s a sunny Monday and the crypto markets are in a good mood. Bitcoin rose above $71,000 for the first time since June 2023, buoyed by a report that U.S. President Joe Biden is planning to postpone a decision on whether to impose capital gains taxes on cryptocurrency gains until next year.

The news outlet Point A Impact made the claim on Monday, adding that the White House is also expected to propose a 0.3% tax on high-frequency trades in cryptocurrencies in Biden's upcoming economic proposals.

The report comes after the Senate Banking Committee advanced legislation on Monday that would create a framework for the regulation of stablecoins.

The bipartisan bill, titled the "Stablecoin Tethering and Bank Money Transfer Act," would require stablecoin issuers to hold reserves in a liquid account at a highly rated bank or savings and loan association. It would also allow any commercial bank or federal savings bank to process payment and money transfer services, and would provide the Federal Reserve with the authority to regulate and supervise these activities.

The bill is expected to be passed by the full Senate in the coming weeks.

Stablecoin issuers would also be required to register with the Federal Reserve and pay a fee for providing money transfer services. The bill would also create a new category of "bank stablecoin" that would be issued by commercial banks and regulated by the Federal Reserve.

The legislation is a part of Biden's broader economic agenda, which is expected to be released later this week. The president's proposals will also include a minimum tax rate of