Incident Overview
On May 22, 2025, Cetus Protocol, the largest decentralized exchange on the Sui Network, was exploited, resulting in a loss of approximately $260 million. The attack triggered a steep crash in token prices—some falling by over 90%—and prompted the team to halt smart contract operations while investigations were underway.
The attacker exploited a flaw in Cetus’s token swap mechanism by introducing spoofed tokens and manipulating the AMM curve's price calculations. These malicious tokens were used to artificially inflate pool reserves and trading prices, allowing the attacker to drain real assets from liquidity pools at distorted valuations. The exploit bypassed standard token validation mechanisms, indicating weaknesses in the protocol’s input verification and curve logic.
The attacker’s wallet was observed holding a range of valuable tokens post-exploit, and laundering efforts were underway through various swaps and transfers.
Incident Report
Protocol Information
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to Cetus CLMM, these are the critical security checks that could have prevented this incident (May 2025).
- Verify all logic paths related to Spoof Token Exploit / Other are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
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