Cetus Protocol Relaunches on June 8 with 85%-99% Liquidity Recovery After $223 Million Hack

Cetus Protocol, a decentralized exchange (DEX) on the Sui and Aptos blockchains, officially relaunched on June 8 at 3:00 UTC, just 17 days after a $223 million exploit targeting its Concentrated Liquidity Market Maker (CLMM) pools. The protocol has restored between 85% and 99% of liquidity in affected pools, enabling users to resume trading, manage liquidity positions, add or remove liquidity, and claim fees and rewards. Supported by a $30 million USDC loan from the Sui Foundation and a comprehensive compensation plan, Cetus is taking significant steps to recover user funds and strengthen its infrastructure, while pursuing legal action to recover remaining assets.

The Exploit and Its Aftermath

On May 22, Cetus Protocol suffered a major security breach in its CLMM pools, resulting in the loss of approximately $223 million in user funds. The attack, one of the largest DeFi exploits of 2025, targeted vulnerabilities in the protocol’s smart contracts, draining liquidity from multiple pools. The incident triggered significant market volatility, with some Sui-based tokens dropping by over 70% and Cetus’ native token, $CETUS, declining by over 50% at its lowest point.

In response, the Cetus team acted swiftly, halting platform operations to contain the breach and collaborating with security experts to assess the damage.

Liquidity Restoration and Compensation Plan

Cetus’s recovery efforts have focused on restoring liquidity and compensating affected users. The protocol has replenished affected pools using three primary sources: assets recovered from the attacker, $7 million from its treasury reserves, and a $30 million USDC loan from the Sui Foundation.

To address remaining losses, Cetus has allocated 15% of its native $CETUS token supply for a compensation contract. Of this, 5% will be immediately claimable upon relaunch, while the remaining 10% will be linearly unlocked over 12 months starting June 10. This structure aims to balance immediate relief with long-term stability, as Cetus emphasized that it will fine-tune the overall vesting schedule in its tokenomics to ensure no additional inflation to the total supply.

According to DefiLlama, Cetus has restored approximately 40% of its peak total value locked (TVL) as of June 9, reaching around $101 million, reclaiming its position as the leading DEX in the Sui ecosystem. The liquidity recovery rate of 85%-99% across affected pools has been hailed as a significant achievement, with most users expected to recover the majority of their assets.

Legal Action and Security Enhancements

The Cetus team is actively pursuing legal action in multiple jurisdictions to recover funds still held by the attacker. While some assets were frozen through cooperation with centralized exchanges and blockchain analytics firms, the full extent of recoverable funds remains uncertain. “We are highly confident that successful arrest and recovering the remaining assets is only a matter of time,” the Cetus team stated in an official announcement.

To prevent future vulnerabilities, Cetus has implemented new security measures, including enhanced smart contract audits and real-time monitoring systems. The protocol also announced plans to transition to an open-source model, allowing greater community scrutiny and collaboration to bolster security. “We’re rebuilding — more secure, more resilient, and more dedicated than ever to delivering secure, powerful and user-friendly DeFi infrastructure for the Sui ecosystem,” the Cetus team said.

Community Sentiment and Ecosystem Impact

The Sui community has rallied behind Cetus’s recovery efforts, with many praising the protocol’s resilience and the Sui Foundation’s financial support.

However, some users expressed caution about $CETUS’s short-term price outlook due to the compensation token release. Following the announcement of Cetus’s compensation and relaunch plan, the price of $CETUS dropped by 14.4.36% within 24 hours, according to CoinGecko data. However, the Cetus team’s prompt response to the security vulnerability and proactive measures may bolster investor confidence in its long-term value.

The relaunch has also drawn attention to broader DeFi security challenges. A recent exploit of the ALEX Protocol on the Stacks blockchain, which resulted in a $14 million loss, has sparked discussions about the need for improved smart contract verification and auditing standards across the industry.

For investors and liquidity providers, Cetus’s relaunch offers an opportunity to re-engage with a battle-tested platform. The protocol’s commitment to open-source development and community governance could further strengthen its position in the competitive DeFi landscape.