The U.S. Securities and Exchange Commission (SEC) held its fifth "Crypto Asset Roundtable" on June 10 this morning. New SEC Chairman Paul Atkins criticized former Chairman Gary Gensler for excessive enforcement of the crypto industry, calling on the government to respect the potential of blockchain and formulate more flexible regulations to encourage innovation. He pointed out that the U.S. free economy and property autonomy coincide with the concept of decentralized finance (DeFi), and also proposed specific directions such as "innovation exemption mechanism" and "self-custody".
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ToggleDeFi is in line with the American spirit, and miners and block validators do not violate securities laws
The theme of this roundtable discussion was to explore the relationship between DeFi and the American spirit. Atkins pointed out that the two concepts coincide with each other because DeFi represents the free economy, property autonomy and innovation of the American spirit.
He emphasized that blockchain allows users to own and transfer "digital assets" without relying on intermediaries, which is a revolutionary economic and technological innovation. The so-called "miners", "block validators" and "staking providers" rely on technical contributions to receive rewards, and should not be considered as violating securities laws. In the future, the SEC needs to further formulate regulations to regulate them.
He then pointed out that many DeFi applications are composed of open source code that is "automatically executed and unmanaged". They do not rely on human operation and can allow users to trade directly, improve efficiency, and reduce costs. This is a new direction for future finance. He emphasized:
"We should not let regulatory thinking from 100 years ago stifle emerging technologies of the future."
Putting assets on the blockchain does not affect property autonomy, Atkins criticizes Gensler for its absurd behavior
Atkins also expressed strong support for users to “self-manage” their crypto wallets. He said:
“The American people’s right to own private property will not be taken away just because it’s on the blockchain.”
He then criticized former SEC Chairman Gary Gensler for saying that "developing a crypto wallet" is illegal, saying that this statement is simply a case of misattribution, just like someone robbing a bank by car and blaming the car manufacturer for it.
Alluding to the collapse of FTX and Celsius, DeFi is more resilient in the face of crises
Atkins also mentioned that in recent years, many centralized exchanges (CEX) have exploded and collapsed one after another, but many open source DeFi protocols are still standing firm, operating stably, and are extremely resilient and transparent.
Although he did not directly name FTX, it was obvious that he was alluding to a series of centralized exchange failures such as FTX and Celsius in the past few years, further highlighting DeFi's ability to resist risks.
Calling for legislative amendments and the establishment of an "innovation exemption mechanism" to promote the development of the U.S. encryption industry
Atkins said that most current securities regulations are regulated by issuers and intermediaries, such as brokers, investment advisors, exchanges and clearing agencies. In order to keep up with the times, Atkins has asked the SEC team to evaluate and provide clear guidance to industry players to help them participate in on-chain activities under legal conditions.
Atkins also instructed the team to study an "innovation exemption mechanism" to help businesses accelerate the launch of on-chain products and services under qualified and compliant conditions. He believes that this will help achieve President Trump's goal of "making the United States the global crypto capital" and promote the innovative development of the U.S. crypto industry.
As soon as Atkins' remarks came out, many DeFi practitioners also shared their support on Twitter (X). For example, Hayden Adams, CEO of decentralized exchange Uniswap, posted :
“Even government agencies are openly considering DeFi as a national priority!”
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
After Cetus Protocol suffered a major security incident, the team chose to take full responsibility and announced that 100% of the $CETUS tokens in their hands would be used to compensate the victims. Through an AMA that lasted several hours, Cetus co-founder Henry responded positively to concerns from all walks of life, including the restart schedule, compensation mechanism, governance plan and future development direction.
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ToggleReview of hacker attack: more than $200 million in assets damaged
On the evening of May 22, the Cetus protocol was attacked by hackers who exploited a vulnerability in the open source function library that the contract relied on. Through Flashswap, adding and subtracting liquidity and other operations, they built false prices and fund pools, and successfully stole more than $220 million in assets. About $60 million of this amount flowed into Ethereum through multiple cross-chain bridges, and the remaining $160 million was successfully frozen on the chain after the team responded quickly and cooperated with Sui Validator.
After the incident broke out, the team quickly suspended the contract operation, notified all ecosystem partners, contacted multiple security vendors and called the police. Currently, the reporting procedures have been completed in many countries, including the United States and Singapore.
100% token investment, more than 85% of assets can be recovered
Regarding the compensation issue that users are most concerned about, the Cetus team clearly stated that the compensation will be sourced from protocol income, cash assets, and all $CETUS tokens held by the team. The compensation method adopts a multi-level mechanism, combined with the Sui Foundation's guaranteed loan, and deploys corresponding compensation contracts for different degrees of loss.
It is currently estimated that 85.7% to 96% of the assets can be directly compensated. If the frozen assets can be recovered through legal means, the overall recovery rate will be close to full. How to use the recovered assets in the future will also be decided by the DAO vote, including whether to repurchase, replenish the reserve pool or give back to the community.
Foundation loan support compensation plan: Not the rumored 60 million, details are still confidential
Regarding the details of the Sui Foundation loan, the Cetus team specifically clarified in an AMA: "The rumored figure of $60 million is not accurate." The actual amount and conditions are still within the scope of the confidentiality agreement (NDA) and cannot be disclosed to the public. However, the team emphasized that a clear consensus has been reached with the foundation that the loan will be part of the overall compensation mechanism to fill the gap of unrecovered assets and help the agreement pass the repair and restart phase smoothly.
As for whether it is an interest-free loan, whether it can be used as a repayment method, etc., the team is currently unable to disclose specific conditions. Henry said that the role of this fund is more like a "bridge loan", helping to provide liquidity support in the early stage of compensation. The protocol itself will still rely on cash assets, protocol income and future revenue as the main source of debt repayment, and will not issue new coins or dilute user rights.
The team does not retreat: Rapid rebound and restart after emotional breakdown
When asked if he had ever thought of giving up, Henry honestly said that the team did face emotional breakdown, anxiety and insomnia at the beginning of the incident, but they regrouped within 24 hours and all members entered a sleepless repair state. He emphasized: "This is not a project that can be withdrawn. This is a product we built from scratch. We must shoulder the responsibility to the end."
The team has invested 100% of the $CETUS tokens in the compensation plan, and no internal distribution will be reserved. In addition, if there is still a surplus in the protocol income, the tokens will be repurchased in the future and included in the community-managed Treasury, and the DAO will decide its use to ensure true decentralization.
Countdown to protocol restart: fully online within 24 hours
The Cetus protocol has entered the countdown phase for restart, and it is expected that all front-end and LP functions will be restored within 24 hours. Three key tasks will be completed before restarting: historical transaction data repair, liquidity injection, and security testing. Once all are completed, the official launch time will be announced as soon as possible.
In addition, the team has pledged to strengthen security, including full open source, establishing a white hat reward mechanism and building an internal risk control system to prevent similar vulnerabilities from happening again.
Compensation scope expanded: covering direct users and indirectly damaged agreements
Henry said that this incident affected not only Cetus users, but also many protocols integrated with its infrastructure. Therefore, the compensation plan will also include these indirect victims, and the scope and amount of subsidies will be confirmed one by one through the registration process.
Regarding the source of the vulnerability, Henry admitted that it was a logical flaw in the product design rather than a single contract vulnerability. In the future, the economic model verification and extreme attack simulation capabilities will be fundamentally strengthened.
DAO governance is not affected by token clearing and revenue will support the sustainability of the protocol
In response to questions about how to maintain operations and governance capabilities after "token clearing", the Cetus team provided data to illustrate: the average monthly revenue of the protocol in the past six months reached US$1.5 million, and the annualized revenue exceeded US$18 million, showing that even without relying on tokens, the protocol itself still has a stable cash flow.
DAO governance will continue to operate, and Cetus will gradually release governance rights to the community. Although the income of $xCETUS stakers may decline in the short term, it is still expected to return to a stable dividend mechanism in the medium and long term as revenue recovers.
Not just repair, but rebuild: market strategy, user confidence and ecological relationship are comprehensively upgraded
The team stated that this crisis is not only a safety issue, but also a comprehensive test of brand, trust and business model. Future strategies will include:
Focus on new assets and new narratives, and introduce Blue Chip, Meme and GameFi;
The technical layer continues to iterate to maintain Sui's leading position in products;
Strengthen interaction with the community and external publicity to expand brand voice.
At the same time, Cetus also plans to introduce Launchpad to support new projects, design innovative incentive mechanisms, and continue to advance the Chinese and international markets.
Facing mistakes, choose to take responsibility: This is not crisis public relations, but a true self-salvation
Henry believes that the choice of full compensation is not out of pressure, but a moral responsibility to the protocol and the community. "Our motivation comes from our understanding and participation in the Sui ecosystem, not the tokens in our hands."
In the future, Cetus will no longer rely on token price support, but will use protocol revenue and product competitiveness as the cornerstone of long-term operations. It also plans to establish more preventive security mechanisms to promote a more stable development of the entire Sui ecosystem.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
