According to Cointelegraph, Sui validators have approved a governance proposal to return $162 million in frozen assets linked to a recent exploit of the decentralized exchange Cetus. This decision marks a significant step toward full user repayment after the exchange was exploited for over $220 million worth of digital assets on May 22. Shortly after the incident, validators managed to freeze $162 million of the funds, preventing further losses. The governance vote, concluded on May 29, saw 90.9% of validators voting in favor of the recovery proposal, with 1.5% abstaining and 7.2% not participating, as reported on the network’s official governance page.
The approved proposal will see the impacted funds moved to a multi-signature wallet, where they will be held in trust until they can be returned to users according to a plan led by Cetus. This decision follows a debate within the crypto community regarding the role of validators in freezing on-chain funds. While some decentralization advocates criticized the ability of validators to freeze funds, others praised the swift response as a positive step in combating growing crypto industry exploits. The community vote is part of a broader recovery plan that includes utilizing Cetus’ treasury and an emergency loan from the Sui Foundation.
Cetus has expressed gratitude for the rapid community support and shared its recovery roadmap following the vote. Initially, Sui validators will implement the upgrade to transfer the frozen funds to Cetus’ multisignature wallet. Subsequently, Cetus will initiate the upgrade for its emergency recovery pool and complete full data restoration. The protocol aims to achieve full recovery and restart within approximately one week. A dedicated compensation contract is currently under development and will undergo auditor review before deployment. Once the full protocol restart is completed, all liquidity providers in the affected pools will regain access to their recovered liquidity. Remaining losses will be claimable through the compensation contract, ensuring that affected users are compensated for their losses.
Miyuki
