Cetus Protocol Announces 100% User Reimbursement After Hack, Sparks CETUS Rally

Cetus Protocol’s native token, CETUS, surged by double-digits following the announcement that the decentralized finance (DeFi) platform, built on the Sui (SUI) network, will reimburse users 100% of the hacked funds to users.

The recovery plan comes in response to the May 22 exploit that caused over $220 million in user losses. The exploit was caused by a bug in Cetus Protocol’s code.

Cetus Protocol to Fully Reimburse Users After Hack 

In the immediate aftermath, Cetus halted its smart contract operations to prevent further losses. Meanwhile, approximately $163 million of the stolen funds were frozen on the Sui network. However, around $60 million in USDC (USDC) was bridged to Ethereum (ETH).

Now, in its latest recovery efforts, Cetus Protocol outlined a strategy to refund the stolen assets. 

“Using our cash and token treasuries, we are now in a position to fully cover the stolen assets currently off-chain if the locked funds are recovered through the upcoming community vote. This includes a critical loan from the Sui Foundation, making a 100% recovery for all affected users possible,” the post read.

The recovery plan relies on a community vote to release the funds frozen in the hacker accounts. The proposal aims to upgrade the protocol to recover these funds without needing approval from the hackers. 

If the vote passes, the funds will be held securely until they can be returned to the affected Cetus users. Voting started at 1 p.m. PST on Tuesday, May 27, and will last up to seven days. However, if the outcome is clear after at least two days, it can end sooner.

“Because full recovery is dependent upon the results of the community vote, we humbly ask for the Sui community’s full support to recover the funds via the upcoming vote. We recognize that this is an extraordinary ask forced by our actions, however we think it is the right decision especially for those affected,” Cetus Protocol added.

The announcement sparked renewed confidence among users and investors. CETUS’ value jumped 15.3% within minutes after the news broke. At the time of writing, the altcoin was trading at 0.16%, representing daily gains of 30.3%.

In addition to the reimbursement plan, Cetus also attempted to recover stolen funds by incentivizing the hacker to return 20,920 ETH, valued at more than $55 million, and other stolen assets in exchange for $6 million and immunity.

“In exchange, you can keep 2,324 ETH (~$6M) as a bounty, and we will consider the matter closed and will not pursue any further legal, intelligence, or public action. This is a time-sensitive offer. Once assets are off-ramped or mixed, we will escalate with full legal and intelligence resources globally. The opportunity to resolve this as a whitehat action will no longer be available,” the offer read. 

Meanwhile, the Sui Foundation introduced a separate $5 million bounty for any tips leading to the identification and capture of the hackers. The foundation has also announced a $10 million security overhaul to bolster ecosystem-wide protections through audits, bug bounties, and developer tools.