Sui Validators Approve Major Recovery Plan

After Cetus, a decentralized exchange, was exploited for over $220 million on May 22, Sui validators acted quickly to freeze $162 million in digital assets. The fate of these funds was determined through a governance vote concluded on May 29.

With 90.9% of validators voting in favor, the recovery proposal passed. The frozen assets will now be transferred to a multisignature wallet and held in trust until distributed to affected users, according to Sui’s official announcement.

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This move signals a pivotal step toward financial restitution for those impacted by the exploit.

Validator Intervention Sparks Governance Debate

The swift validator action reignited debate within the crypto world. While decentralization purists voiced concern over the ability to freeze onchain assets, others praised the move as an effective counter to escalating security threats in DeFi.

The recovery initiative extends beyond the frozen funds. It will also leverage Cetus’ own treasury and an emergency loan from the Sui Foundation to fully restore protocol operations.

Cetus Targets Full Recovery Within One Week

Cetus expressed appreciation for the rapid community support and outlined a full roadmap for protocol recovery. The first phase involves upgrading validator nodes to transfer the funds to a multisig wallet, followed by system restoration.

The team expects a full restart within one week. All liquidity providers will regain access to their assets, while remaining losses will be compensated via a dedicated smart contract currently undergoing auditor review.

Cetus emphasized that this compensation mechanism will ensure fair restitution for all affected users.

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As of May 6, over 99.97% of votes cast on the WLFI governance forum supported the plan, with over 2.6 billion votes in favor and just 901,000 votes against.

“Testing the airdrop system in a real environment is essential to ensure smart contract reliability. It also acts as a meaningful thank-you to our earliest community members,” the proposal reads.

USD1 Test Launch And WLFI’s Growth Strategy

The exact amount of USD1 to be airdropped has not been disclosed and will depend on the number of eligible wallets and available budget. No date for the airdrop has been announced. WLFI reserves the right to suspend, modify, or cancel the test at any time.

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WLFI launched the USD1 stablecoin in March 2025. Since its September 2024 debut, the firm has conducted two public token sales, raising a total of $550 million from over 85,000 registered holders.

The Global Race For Stablecoins Intensifies

The market cap of US dollar-pegged stablecoins reached $230 billion in April, according to Citigroup, a 54% increase year-on-year. Tether (USDT) and USDC continue to dominate 90% of this market.

Meanwhile, other nations are exploring their own non-dollar stablecoins. On April 28, three major Abu Dhabi institutions revealed a dirham-backed stablecoin project. And in Russia, the Finance Ministry proposed creating a national stablecoin after sanctions froze wallets linked to Garantex and Tether.

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