Sui Hacker Drains $200M+, Kraken Tokenizes Stocks, New BTC ATH

Olivia Capozzalo & Camila Russo
May 22, 2025

gm Defiers

Happy 15th Bitcoin Pizza Day 🍕

Today’s big story:

• SUI hack spurs questions about the Move language’s security and the chain’s decentralization

Plus:

• Markets: another day, another Bitcoin ATH
• Kraken launches tokenized U.S. stocks
• Stellar network aims to become top 10 DeFi chain [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

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Learn the difference between Proof of Agreement (PoA) versus Proof of Stake (PoS) consensus mechanisms.

No consensus mechanism is perfect, and PoA does mean the network’s decentralization is as strong as the community’s web of trust. But for a financial infrastructure connecting known institutions, that trade-off yields a network that is highly resilient to the security issues currently plaguing PoS chains. In a world where blockchains may become critical public infrastructure, the Stellar approach of “staking reputation over coins” could prove to be a compelling way to safeguard consensus from both economically rational exploits and irrational threats.

READ MORE: Proof-of-Stake vs. Proof-of-Agreement: Stellar's Security Edge

We’re back! Here’s what you need to know in web3 today

Sui’s Biggest Test

Dear Defiers, is it too soon for a chop-SUI joke? Probably. The Sui ecosystem is facing its toughest challenge yet, as over $200 million in tokens were drained from its biggest DEX.

Before dawn, a single address began minting spoof tokens on Cetus Protocol, the network’s main DEX and liquidity hub. The attacker was able to trick Cetus’ math into over-valuing the fake tokens, then drained roughly $223 million in real assets — SUI, USDC and assorted memecoins — in less than an hour. Investigators say the exploit hinged on the DEX equivalent of counterfeiting poker chips and cashing them in.

Cetus slammed the brakes, pausing their smart contracts. That bought the Sui core team time to marshal their own firepower as a “large number of validators” coordinated to ignore transactions of addresses with stolen funds, according to the statement SUI issued on X.

By mid-afternoon, they had succeeded in freezing about $160 million of the loot, according to Sui co-founder Adeniyi Abiodun, who promised the funds would be sent back to liquidity providers once forensics wrap up. Still, the hacker was able to bridge $60 million over to Ethereum, and exchanged USDC for ETH, a testament to the chain’s censorship resistance.

Sure, a partial clawback is good news for users, but it also calls into question whether Sui is actually decentralized. Freezing assets on demand requires privileged actors and emergency keys; otherwise, the chain would shrug and let code be law.

That capability lives deep inside Sui’s object-centric storage, where any object with a store flag can be made mutable or immutable and can be stored on- or off-chain. Some may argue that’s a necessary seat-belt while the network is young; purists will note that “immutable money” with a freeze switch is an oxymoron. Either way, the episode leaves a paper trail that regulators and would-be censors will study closely.

Then there’s Move, the language Sui touts as “secure by default.” Today’s breach isn’t the first blemish on that narrative. Aptos’ Thala money market lost $25 million last November. But it is by far the largest attack on a Move-based chain, and the first to hit Sui itself. The takeaway isn’t that Move is unsafe but that no language can fix economic design flaws or unchecked privileges.

Sui’s official website

And speaking of Aptos, co-founder Mo Shaikh wasted no time in using the exploit as an opportunity to highlight that not all Move-language chains are created equal, and that, according to him — surprise! — Aptos is so much better. “Aptos has always had a more modular architecture, more secure execution, and a broader vision. The market hasn’t priced this in—yet,” he tweeted.

Markets wasted no time either. The CETUS token cratered 40% before stabilizing in hopes of recovery. The token was down 19% at the time of writing. Surprisingly, SUI was down less than 1%, signaling that traders are speculating this may be just a battle scar for the chain.

CETUS 24-hour price chart. Source: CoinGecko

Zoom out and the hack lands at an awkward moment for Sui: TVL was climbing and SUI was one of the top performing Layer 1 tokens this past year, surging ~250%, compared with SOL’s 0.3%, ADA’s 67%, AVAX’s -36% and APT’s -37%. Meanwhile, developers were trumpeting the Move language’s virtues and Sui was angling to pitch itself as the top next-generation chain.

The next few days will test that pitch.

With love,

Cami, founder of The Defiant

📈 Markets in the last 24 hrs:

	TICKER	VALUE	24H
	Bitcoin	$111,725	4.40 %
	Ethereum	$2,661.15	7.22 %
	XRP	$2.43	2.99 %
	BNB	$681.2	1.90 %
	Solana	$179.29	6.64 %

This is the news that mattered in the past 24 hrs:

1. Bitcoin continued to rally today, reaching another all-time high above $111,000, while ETH, SOL and other large-cap alts surged 6-7% on the day.
2. In another win for tokenized RWAs, top U.S. crypto exchange Kraken is launching tokenized versions of U.S. stocks for non-U.S. people to trade.
3. The hackers of top Sui DEX Cetus quickly swapped a portion of the stolen tokens for ETH, highlighting the robustness of the Ethereum ecosystem, which includes anonymous token mixers with high liquidity.

🎬WATCH

In our latest podcast, we interview Shaw Walters, the founder of Eliza Labs, one of the biggest projects at the intersection of crypto and AI.

We talk AI, but Shaw also talks passionately about why the current financial system is broken — “immoral” even — and how crypto can help us break free. But only if we manage to move past the casino phase. Give it a listen, it’s a heated one.

That’s it for today — if you enjoyed this newsletter, tell your friends! https://thedefiant.io/subscribe