Sui’s 90.9% Vote Authorized Two Recovery Transactions Without Hacker Signatures

1. One Wrong Constant Broke Sui’s Largest DEX

On May 22, 2025, an attacker drained Cetus, the largest decentralized exchange on the Sui network, through what security firm Halborn later traced to a flawed overflow check. Cetus reported that more than $220 million was stolen; Halborn estimated losses at $223 million. Within hours, the central question was no longer how the money left, but how much could still be contained.^[3][6]

The exploit mechanics were strikingly concise. The attack opened with a flash loan — reported by rekt at 56,700 SUI — followed by taking a liquidity position across a narrow tick range of [300000, 300200], funded by a single SCA token.^[3][4]

The vulnerability resided in checked_shlw, a helper function intended to verify whether shifting a 256-bit integer left by 64 bits would overflow. Halborn found that the code checked against 0xFFFFFFFFFFFFFFFF << 192 rather than 0x1 << 192. Values that should have failed passed the check, the arithmetic overflowed, and one deposited token was credited as an astronomical liquidity stake.^[3]

The attacker withdrew that phantom position across multiple pools. rekt reported the minted liquidity reached roughly 10³⁴ units and noted that every Cetus AMM pool was hit. Move protects against most arithmetic overflows, but permits bit shifts to overflow by design. The flaw sat in the shared integer-mate library, which Zellic stated was outside the scope of its April 2025 audit — and Verichains reportedly found the same function copied across other Sui protocols.^[4]

2. The Freeze That Started the Argument

The emergency response began immediately on May 22, well before any governance ballot. Sui validators coordinated to ignore transactions from the attacker's addresses, and Cetus reported that about $162 million of the stolen funds was successfully frozen mid-flight. That validator action contained the majority of the exploit.^[6][1]

“A large number of validators identified the addresses with the stolen funds and are ignoring transactions on those addresses until further notice.”^[6]

— Sui Foundation, May 22, 2025 statement

Not all assets were caught on Sui. Independent tracking revealed that more than $60 million crossed the Wormhole bridge to Ethereum, where roughly 20,000 ETH was transferred to a fresh wallet. Security firm Hacken’s Extractor tool estimated the bridged total at about $63 million.^[4][6]

Negotiation followed quickly. As reported by rekt, Cetus and blockchain intelligence firm Inca Digital signed an onchain message offering the attacker about $6 million (2,324 ETH) to return the funds. When silence followed, Cetus posted a $5 million bounty for information leading to identification and arrest. Meanwhile, the freeze ignited controversy: if validators could halt fund transfers without a vote, critics asked what ownership truly meant on Sui.^[4][8]

3. A Protocol Upgrade on the Ballot

Five days after the exploit, at 1pm PST on May 27, 2025, Sui launched an onchain community vote. Validators cast stake-weighted votes — yes, no, or abstain — through a transparent smart contract. Votes were final once submitted, and the Sui Foundation's own stake was excluded to ensure procedural neutrality.^[1][5]

The approval threshold was strict: more than 50% of total network stake (excluding abstentions) had to participate, and yes-weighted stake had to exceed no-weighted stake. The schedule allowed up to seven days with early closure permitted after two once mathematically decisive. Token holders participated indirectly through their delegated validators.^[1]

The vote concluded early on May 29, 2025. Validators representing 90.9% of stake voted yes, while 1.5% abstained and 7.2% did not participate, per governance records reported by Cointelegraph. The vote authorized moving the frozen funds into a multisig trust — not a blanket seizure power, but authorization for two specific recovery transactions.^[7][1]

“Validators representing 90.9% of stake have said “yes” in the onchain community vote, and the vote has concluded early.”^[1]

— Sui Foundation, vote-conclusion update

4. Two Transactions Without Hacker Signatures: Address Aliasing

Software updates moved in lockstep with the ballot. On May 27, developer mystenmark opened pull request #22237 — titled “Protocol update to allow recovery of stolen funds” — on the MystenLabs/sui repository. It merged on May 30 across nine commits on branch recover-via-address-alias.^[2]

“ProtocolConfig can specify address aliases which allow a signature from address A to act as the sender address B.”^[2]

— mystenmark, PR #22237 description

The upgrade established two tuples containing hacker address, aliased address, and exact TransactionDigest — authorizing exactly one recovery transaction per hacker address. The address deny list would be bypassed strictly for those two allowed transactions; the proposal and PR said the crafted transactions would be publicized for community inspection before the protocol upgrade.^[1][2]

“This mechanism is specific to the two recovery transactions and cannot be used for any other purpose”^[1]

— Sui Foundation, protocol upgrade technical details

Custody of the funds to be recovered was assigned to a 4-of-6 multisig trust wallet: two keys held by Cetus, two by the Sui Foundation, and two by OtterSec, an auditor characterized by the Foundation as trusted in the Sui ecosystem. Cetus was to propose and sign recovery transactions, OtterSec to verify they conformed to the public plan, and the Foundation to sign only if other signers were unable.^[1]

5. Held in Trust: The Receipt for the Rescue

After the vote, the Sui Foundation said the frozen assets would be moved to the multisig trust pending distribution under Cetus’s recovery plan, which included Cetus treasury funds and a loan from the Foundation. Cetus stated that it targeted full recovery and a restart in approximately one week and that a dedicated compensation contract was under development and would undergo auditor review before deployment.^[1][7]

The intervention sparked intense debate across the cryptocurrency sector. As Cointelegraph's Finance Redefined reported, decentralization advocates criticized the validators' ability to pause asset transfers as evidence of centralization. Conversely, other industry observers commended the rapid coordination as essential protection when ecosystem users are exploited.^[8]

The record presents a striking contrast. On one side stood an emergency validator freeze before any vote, followed by a narrow, stake-ratified protocol upgrade limited to two transactions and a split multisig. On the other stood proof that a stake supermajority can redirect funds without the holder's signature.^[1][2][8]

That tension defines the legacy of the Cetus recovery decision. Cetus requested it, validators representing 90.9% of stake approved it, code narrowly constrained it, and OtterSec was assigned to verify proposed distributions against the public plan — yet the network still had to treat two addresses as exceptions. As the Foundation emphasized, protocol governance requires active participation; on Sui, that participation authorized how about $162 million in frozen funds would be recovered.^[1]