A breach allowed hackers to siphon off approximately $223 million in virtual assets from cryptocurrency exchange Cetus Protocol.
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The incident occurred on May 22 and led Cetus to immediately suspend its smart contract, however the hackers managed to extract both native SUI tokens and other digital currencies.
The attackers exploited a vulnerability in an open-source library used in the liquidity provider's smart contract, manipulated pool prices and drained token reserves , repeating the process several times, according to Cetus' report after the incident
The hackers initially exchanged USDT for USDC, two stablecoins issued by Tether and Circle respectively, and then transferred the funds to the Ethereum, where they converted them to the native cryptocurrency, according to blockchain analytics firm Elliptic. Cetus identified two SUI wallet addresses controlled by the attackers, as well as two Ethereum wallets where some of the stolen funds ended up after being converted.
See also: Coinbase: Data breach affects 69,461 customers
The hackers made off with about $223 million, but Cetus said it managed to freeze $162 million in assets . This makes the attack the second-largest cryptocurrency theft this year, behind the $1.5 billion Bybit breach .
The company offered the hackers a “whitehat settlement”: they can keep $6 million as a reward, as long as they return the remaining stolen assets in Ethereum and SUI.
Cetus says it is working with its partners to implement a recovery plan, with the goal of immediately restoring liquidity withdrawals and other core operations. Late Monday night, the exchange announced that it has already developed a plan that provides for full compensation for lost assets.
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The Cetus Protocol breach once again highlights the serious security risks faced by decentralized finance (DeFi), especially when open source libraries are used without adequate oversight. Despite the large loss, the platform’s speed of response — both by freezing contracts and by locating and recovering some of the funds — shows that defense mechanisms are evolving. The fact that a whitehat settlement was offered reflects a more pragmatic approach to dealing with such incidents, focusing on asset recovery and user protection
Source: securityweek
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