The Sui Foundation Abstains From Upcoming Vote to Recover $162M Frozen from Cetus Protocol Hack

The Sui Foundation has announced it will abstain from an upcoming community vote on recovering $160 million in frozen funds from the recent Cetus protocol hack.

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

The blockchain network is preparing 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.

How Sui validators coordinated emergency freeze

The Sui validator network responded quickly to the security breach by implementing emergency measures to prevent further asset drainage.

One-third of validators by stake weight began ignoring 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 of each validator, based on their own internal risk assessments or compliance requirements.

This is a standard function of full nodes on the Sui network, and it's used by each validator to configure their node's behavior.

However, it's worth noting that the freezing mechanism has limitations. While validators successfully prevented the attacker from bridging a substantial portion of the stolen funds off the Sui network, approximately $60M in assets had already been moved before the freeze took effect.

Cetus is collaborating with Inca Digital, leading security firms, and international law enforcement agencies to recover the remaining compromised funds.

The Sui Foundation will be supporting the community vote process with two conditions.

Firstly, the foundation will maintain complete neutrality regarding the outcome of the vote. It emphasized its role as a facilitator rather than a decision-maker for community governance.

Secondly, 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.