Cetus Protocol Halts Operations After $260 Million Hack, Sending Sui Tokens Into Freefall

Significant funds have reportedly disappeared from one of SUI’s leading DeFi platforms, Cetus Protocol, putting users and the wider crypto community on high alert.

The platform has paused all activity, citing an incident now believed to be one of the largest breaches on the SUI blockchain to date. Following the incident, Sui ecosystem tokens are experiencing a sharp drop in prices.

Cetus Protocol Halts All Operations

Cetus Protocol, a major decentralized exchange and liquidity provider on the SUI blockchain, is at the center of a growing security crisis. The team has paused all smart contracts to protect user funds while an internal investigation is underway.

“There was an incident detected on our protocol and our smart contract has been paused temporarily for safety. The team is investigating the incident at the moment. A further investigation statement will be made soon. We are grateful for your patience,” the company posted

Initial reports from the team attributed the breach to an Oracle bug. But mounting on-chain evidence pointed to a deliberate and coordinated exploit.

Now, prominent blockchain analyst LookOnChain has confirmed that Cetus Protocol was hacked, with more than $260 million in assets stolen. According to LookOnChain’s report on X, the attacker drained massive sums from the protocol and is actively moving funds through bridges and mixers in an attempt to obscure the flow of capital.

“Cetus on SUI was hacked and lost more than $260 million! The hacker is converting the stolen funds into USDC and cross-chaining to Ethereum to exchange for ETH, with ~60M USDC already cross-chained,” LookOnChain wrote.

This confirmation has fueled widespread panic, especially as no official post-mortem or technical breakdown has been released by the Cetus team. Volatility has gripped SUI markets, and liquidity pools remain disrupted across the network

“The biggest LP provider on SUI was just hacked Hopefully CETUS resolve this and fast because it is affecting the entire ecosystem,” wrote crypto analyst Gordon on X.

In an update, LookOnChain added that the hacker has spent over 58 million USDC to buy 21,938 ETH at an average price of $2,658.

Cetus Hacker Spends USDC to Buy ETH. Source: LookOnChain on X

On-chain analysts have also begun piecing together the potential exploit path. One analyst reviewing the transactions suggested that all Cetus Protocol liquidity pools were likely drained using a multi-step exploit. The hack likely abused vulnerabilities in token pricing and liquidity mechanics.

Broader concerns have also emerged across the SUI ecosystem, as multiple tokens tied to the network saw sudden price crashes. One market observer noted that major coins like HIPPO and LOFI plunged 70–80%. Token swaps on decentralized exchanges have also begun to fail.

“All SUI tokens just went to 0 due to an apparent hack on Cetus,” a user posted on X.