Cetus, Sui Criticized For Centralization After Stolen Funds Frozen

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Cetus and the Sui Basis are going through criticism after validators froze a big portion of the $223 million that was stolen throughout the Cetus hack on Might 22, elevating centralization issues.

Cetus and the Sui Basis introduced that validators had frozen a majority of the stolen property. In accordance with the Cetus workforce, $163 million of the $223 million was frozen by validators and ecosystem companions on the identical day because the incident.

Nonetheless, the transfer to freeze the funds was criticized, with a number of Web3 neighborhood members saying it “undermines the rules of decentralization.”

“Sui validators are actively censoring transactions throughout the blockchain,” wrote one person on X, echoing related posts by neighborhood members.

SUI validators are actively censoring transactions throughout the blockchain.
This fully undermines the rules of decentralization and transforms the community into nothing greater than a centralized, permissioned database.

— Dave (@ItsDave_ADA) May 22, 2025

One other person by the identify of Steve Bowyer additionally stated that “many Net initiatives backed by VCs” appear to “lean closely on centralization, regardless of borrowing Bitcoin’s ethos.”

Safety Agency Pinpoints Important Trigger Of The Cetus Hack

Blockchain safety firm Dedaub pinpointed the basis explanation for the Cetus hack that noticed the decentralized change platform drained of $223 million inside a 24-hour interval.

In accordance with the safety agency’s Might 23 report, the hackers exploited a flaw in essentially the most vital bits (MSB) examine.

That “allowed them so as to add huge liquidity positions with only one unit of token enter, subsequently draining swimming pools collectively containing a whole lot of hundreds of thousands of {dollars} price of tokens,” the agency wrote of their report.

SUI Value Struggles Proceed

Because the Cetus hack, SUI’s market capitalization has dropped from $13.907 billion previous to the incident to round $11.67 billion on Might 25, in keeping with CoinMarketCap knowledge. This was after the crypto’s value additionally dropped over 2% within the final week and recorded one other minor loss previously 24 hours.

SUI’s market cap has since recovered to round $12.09 billion. Nonetheless, the undertaking was not too long ago overtaken by Hyperliquid (HYPE). As such, HYPE is now the eleventh largest crypto by market cap with its valuation of round $12.85 billion.