The coordinated action by Sui validators to freeze hacker-controlled wallets during the $260 million Cetus exploit has been criticized as fundamentally contradicting the decentralized ethos of blockchain systems.

Opposing arguments

Validators on the Sui blockchain successfully froze approximately $162 million in stolen funds following the Cetus protocol hack on May 22, 2025, reducing the impact of the $260 million theft.

Cetus halted its smart contracts immediately after a $260 million exploit in order to prevent additional fund losses.

The decision by Cetus to pause smart contracts during the $260 million hack was intended to protect user funds and initiate a responsible recovery process, including offering a whitehat agreement to the hacker.

The coordinated emergency response by Cetus, Sui validators, and cybersecurity firm Hacken following the largest DeFi exploit in Sui’s history enabled the recovery of most of the stolen assets and minimized systemic fallout.

Quotes that support claims

While this is good in this case, this shows SUI network can freeze your funds on demand. Decentralization is just marketing outside of BTC/ETH.

Although the intent behind pausing the contracts may have been good, many experts argue that this action contradicts the spirit of decentralization, the foundational value of blockchain. Jesus Martinez, founder of Legion, claimed this was clear evidence that Sui is not truly decentralized.

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Supporting arguments

The Sui network has previously been accused of centralization due to high token concentration among founders and the limited number of validators.

The ability of Sui validators to selectively block transactions raises questions about the network’s long-term credibility as a censorship-resistant platform in the DeFi space.