The bounty offer to recover stolen funds from Sui-based decentralized exchange (DEX) Cetus closely resembles a successful strategy used by a Solana project three years ago.

It turns out that Cetus shares the same development team as Crema Finance, a Solana-based DeFi project that suffered a $9-million hack in 2022 but recovered most of the funds by negotiating with its hacker. Now, Cetus is relying on the same strategy.

Cetus is asking the hacker to return all but $6 million, or 2,324 Ether (ETH), of the stolen funds in exchange for a promise not to pursue legal action. The protocol lost $223 million to an exploit on May 22.

The size of the bounty has sparked backlash from users, with many calling for a formal compensation plan instead. Several community members argue that even if funds are recovered, most of the damage has already been done — especially to holders of the CETUS token, which plummeted in value following the incident.

Meanwhile, Sui validators are also under fire for their role in freezing the funds. The move is aimed at aiding recovery, yet critics say it exposes centralization risks in the network.

CETUS immediately dropped around 35% following the hack. Source: CoinGeckoSui’s Cetus devs have a phantom exchange on Solana

A similar negotiation strategy used by the Cetus team on Sui was successfully employed years ago to recover funds for Crema. The Solana project hasn’t posted on its X account since March 2023, and its trading platform now sees negligible volume, but it still didn’t end well for the hacker.

Crema suffered an approximately $9-million hack in 2022. Much like the Cetus case, the Crema hacker was offered a deal to return the funds while keeping $1.6 million in exchange for not reporting the attack to law enforcement.

Cetus offers a $6-million reward and exemption from further legal action from the project if the remaining funds are returned. Source: SuiVision

The hacker is believed to have been caught and sent to prison. In April 2024, the US Attorney’s Office for the Southern District of New York sentenced Shakeeb Ahmed to three years in prison for hacking two separate cryptocurrency exchanges. One was identified as Nirvana Finance, while the other was not named.

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The details of the unnamed exchange’s case match Crema’s hack, including the exact date of the exploit and the terms of the agreement. 

Norbert Bodziony, founder of Nightly App, claims the Cetus team was behind Crema Finance.

Crema Finance suffered a hack in July 2022. Source: Norbert Bodziony

Bodziony declined to disclose how he learned of the relationship to Cointelegraph but added that the connection is “commonly known” in Sui’s developer circles. 

Cointelegraph reached out to Cetus to confirm the connection between the two projects, but the team had not responded by publication.

Cointelegraph has separately learned that both projects are founded by Henry Du.

Save Cetus; centralize Sui

Sui’s validators have collectively blocked transactions from the hacker’s addresses, effectively freezing $162 million of the stolen funds on Sui. Around $63 million had already been bridged to Ethereum before these controls were implemented.

Although the coordinated effort has been effective in preventing the funds from being laundered, the cryptocurrency community has criticized Sui for being too centralized.

“SUI’s validators are colluding to CENSOR the hacker’s TXs right now! Does that make SUI centralized? The short answer is YES; what matters more is why? The ‘founders’ own the majority of supply & there are only 114 validators!” Justin Bons, founder of Cyber Capital, wrote on X.

Some users challenge Bons’ claim, arguing that decentralization doesn’t mean a free-for-all. Source: Squatch/Justin Bons

As Bons pointed out, Sui has just 114 validators — far fewer than its more established smart contract peers. Ethereum has over 1 million validators, while Solana has 1,157.

Meanwhile, members of the Sui community defended the move, arguing that this is how real-world decentralized chains should function.

“Decentralization isn’t about standing by while people get hurt, it’s about the power to act together, without needing permission,” said one member of the Sui community.

Related: WLFI’s DeFi credentials under fire after Sui partnership

Following the hack, Sui developers committed code for a proposed function that would have allowed specific transactions to bypass all signing and safety checks by adding them to a whitelist. 

While the function could have been used to help recover stolen funds, it also raised concerns about centralized control and the erosion of decentralization. The code was ultimately not merged and is not live on the network.

SUI’s price has also been damaged by the Cetus exploit. Source: CoinGeckoSui and Cetus backlash contrasts recent hacks

The Cetus exploit has spotlighted the persistent security challenges in DeFi while raising deeper questions around who holds the reins in supposedly decentralized networks like Sui.

The team’s $6-million offer to the hacker mirrors the playbook it used with Crema — but this time, the crypto community isn’t as forgiving. With CETUS tanking, trust fractured and validators freezing funds, critics are asking whether Sui’s decentralization is more appearance than reality.

The debate over decentralization isn’t unique to Sui. When Bybit lost $1.4 billion in a February hack linked to North Korean state actors, security experts and users urged platforms like THORChain and eXch to block the funds. 

In that case, THORChain received some backlash for not stepping in, which is the exact opposite of what Sui is being criticized for now.

As of now, the hacker hasn’t accepted Cetus’ offer. Two Ethereum wallets tied to the exploiter still hold over $60 million in ETH, with no movement at the time of writing. The Sui addresses remain paralyzed.

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Digital asset lender Ledn is transitioning to fully collateralized Bitcoin lending and discontinuing support for Ethereum, in moves designed to consolidate its BTC-focused business and further safeguard client assets against credit risks.

In adopting a full custody structure for Bitcoin (BTC) loans, Ledn will no longer lend out client assets to generate interest, the company disclosed on May 23. Instead, Bitcoin collateral will remain under full custody by Ledn or one of its designated funding partners. 

“This means assets aren’t rehypothecated, reused, or loaned out to generate yield,” Ledn co-founder and CEO Adam Reeds told Cointelegraph.

Reeds said the move brings the company back to its roots and aligns more closely with Bitcoin’s founding principles.

“Bitcoin was created as a direct response to the risks of fractional reserve banking and unchecked use of client assets to generate interest,” said Reed, adding:

“Traditional finance relies on constantly reusing client assets to create leverage and, ultimately, inflation. Bitcoiners instinctively reject that model. That’s why we’ve moved away from this approach entirely. 

Reed told Cointelegraph that the company is ending support for Ether (ETH) as “part of a broader strategic shift,” as Bitcoin represents over 99% of Ledn’s client activity.

“Rather than fragmenting the platform to chase marginal volume, we’re going all-in on Bitcoin and simplifying our stack to reflect what our clients actually value,” said Reed.

Founded in 2018, Ledn has emerged as one of the largest lenders in the digital asset space with a loan book value of $9.9 billion, according to Galaxy Research. The company enables Bitcoin holders to borrow against their assets, giving them access to liquidity without having to sell their holdings or trigger a taxable event.

This approach is commonly used by wealthy investors, who take out low-interest loans against stocks, real estate, and other assets to access cash.

Bitcoin’s price has reached new all-time highs above $111,000. Instead of selling their assets for cash, long-term investors can borrow against their holdings. Source: Cointelegraph

Related: ‘Before Bitcoin, my most successful investment was shorting the Bolivar’ — Ledn co-founder

Digital assets are disrupting TradFi

Bitcoin’s genesis block was mined in the wake of the global financial crisis in 2008, offering the world a sound money alternative to the inflation-prone fiat monetary system. 

Bitcoin now thrives within traditional finance, especially after the successful launch of spot exchange-traded funds (ETFs) in 2024.

Institutional investors have embraced the spot Bitcoin ETFs, as evidenced by the continued surge in cumulative inflows. Source: Farside

While financial institutions are increasingly embracing Bitcoin, some members of the banking lobby are reportedly concerned about other blockchain innovations disrupting their business models. 

Specifically, the banking lobby is “panicking” over yield-bearing stablecoins, which can pay higher interest rates and other financial incentives that traditional banks have largely abandoned, according to New York University professor Austin Campbell. 

Referring to banks as a “cartel,” Campbell said financial institutions rely on fractional reserves to maximize profits while offering depositors minimal interest. 

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Binance co-founder and former CEO Changpeng “CZ” Zhao has pushed back against a report in The Wall Street Journal, calling it a “hit piece” filled with inaccuracies and negative assumptions. 

In an X post, Zhao criticized the publication’s portrayal of his alleged involvement with World Liberty Financial, the decentralized finance project backed by a business entity affiliated with US President Donald Trump. Trump’s sons — Eric and Donald Jr. —are involved in the management of the company.

Zhao said the WSJ article portrayed him as acting as a “fixer” for the WLF team and its co-founder Zach Witkoff during foreign trips. 

The article suggested Zhao facilitated introductions and meetings for WLF leaders during foreign trips, including a visit to Pakistan that reportedly resulted in a memorandum of understanding with a local official.

“I am not a fixer for anyone,” Zhao said, firmly denying that he connected Pakistani official “Mr. Saqib” with WLF or organized any engagements abroad. “They had known each other way back, whereas I only met with Mr. Saqib for the first time in Pakistan.” 

Source: Changpeng ZhaoWSJ reports on Steve and Zach Witkoff

Zhao’s response follows a WSJ investigation highlighting a complex string of diplomatic and business interests involving WLF. 

The report raised concerns about the blurred lines between public duties and private interests and focused on diplomatic and business dealings involving WLF co-founders Steve Witkoff and his son, Zach Witkoff. Steve Witkoff serves as the US Special Envoy to the Middle East under the Trump administration, while Zach Witkoff has been involved in securing a reported $2 billion crypto deal.

The report raised questions about whether diplomatic efforts overlapped with private crypto ventures, and implied Zhao may have been attempting to curry favor with the Trump administration

On May 6, Zhao confirmed that he is seeking a pardon from the Trump administration for his earlier money laundering conviction. 

The report also highlighted that WLFI, which raised over $600 million in token sales, does not disclose the names of all its investors aside from some publicly known ones like Tron founder Justin Sun, who attended Trump’s memecoin dinner on May 22. 

Trump hosted the dinner for the largest investors of his Official Trump (TRUMP) memecoin. Sun, Magic Eden CEO Jack Lu and BitMart CEO Sheldon Xia were among attendees and shared photos of the event.

Related: Binance scores legal win as UK court partially dismisses Bitcoin SV lawsuit

Zhao claims the WSJ report is an “attack” on crypto 

Zhao claimed the WSJ submitted a list of questions containing what he described as “wrong and negative assumptions.” He and his public relations team responded by pointing out several factual inaccuracies, he said, but concluded that the article was “built on a flawed narrative.”

Zhao slammed the WSJ, calling it a “mouthpiece” for anti-crypto forces in the United States. He said the forces behind the publication want to hinder efforts to make the US a crypto capital. 

“They want to attack crypto, global crypto leaders and the pro-crypto administration,” CZ claimed, saying the article is part of a broader effort to stifle the industry’s growth in the US.

This is not the first time Zhao has clapped back at the WSJ recently. In an April 11 report, the publication cited anonymous sources alleging that Zhao agreed to testify against Tron founder Justin Sun as he settled with US prosecutors. 

CZ dismissed the report, saying that people who become government witnesses don’t go to prison and are protected. CZ also claimed that someone paid WSJ employees to smear his name.

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