Sui-based Nemo Protocol Faces $2.4 Million Exploit

Nemo Protocol, a decentralized finance (DeFi) yield platform on the Sui blockchain, has suffered a significant security breach resulting in the loss of approximately $2.4 million in USDC stablecoins. As investigations continue and security measures are scrutinized, this incident raises deeper concerns about vulnerabilities in the Sui ecosystem.

Key Takeaways

Nemo Protocol lost around $2.4 million due to a smart contract exploit.
The breach was reported on September 8 by PeckShieldAlert, prompting immediate action from Nemo to suspend contract activity.
The attack echoes historical vulnerabilities seen earlier this year with Cetus Protocol, which lost $223 million.
Overall, DeFi breaches have surged in 2025, contributing to significant losses in the crypto industry.

Sui-based Nemo Protocol exploited for $2.4m - 1

The Incident at Nemo Protocol

The Nemo Protocol, a yield farming platform built on the Sui blockchain, was the target of a major exploit that drained millions in stablecoins. The breach was first reported by PeckShieldAlert on September 8, which indicated that roughly $2.4 million in USDC had been stolen. According to the blockchain security firm, the attacker transferred the stolen funds from Arbitrum to Ethereum shortly after the exploit.

In response, Nemo confirmed the attack via a tweet, stating that they are investigating the situation and have temporarily halted all smart contract activities.

"Nemo experienced a security incident last night, impacting the Market pool. We are investigating the matter and have suspended all smart contract activity for the time being. We plan to share more information as it becomes available. All Vault assets remain untouched."
— Nemo (@nemoprotocol)

Following the attack, the damage was evident. Data from DeFiLlama revealed that Nemo's total value locked (TVL) dropped to approximately $1.53 million, a sharp decline from over $6 million before the incident. The exploit specifically targeted the protocol’s yield-trading system, which allows users to segment staked assets into different tokens for speculative trading on future returns.

Community Concerns and Security Challenges

The specifics surrounding the breach have left many questioning the security protocols in place. This incident has alarmed the protocol's community, especially as a similar exploit took place just months prior, affecting another protocol on Sui, known as Cetus.

On May 22, the Cetus Protocol faced a severe exploit, resulting in a loss of $223 million. The attacker exploited an arithmetic overflow vulnerability in a third-party math library, managing to drain funds in less than 15 minutes. In response, Sui validators and ecosystem partners froze about $162 million of the stolen assets on-chain, with $60 million moved to Ethereum. Cetus also suspended its smart contracts and initiated recovery efforts, including a $6 million bounty and discussions of offering amnesty to the attacker if remaining funds were returned.

The Broader Landscape of DeFi Exploits

These high-profile attacks highlight an alarming trend in 2025: the increase in DeFi-targeted vulnerabilities. According to SlowMist’s mid-year report, the blockchain industry experienced losses exceeding $2.37 billion due to 121 security incidents during the first half of the year, with DeFi making up 76% of these incidents. Centralized exchanges, however, faced larger total losses.

Further analysis from Hacken's mid-year security report indicated that the total losses for the crypto industry surpassed $3.1 billion in the same period. Access control failures, such as misconfigured wallets and outdated keys, accounted for 59% of these losses, while DeFi-related smart contract issues, like the vulnerability affecting Cetus, led to losses of about $263 million, or roughly 8%.

As hackers increasingly target DeFi protocols across various blockchains, the Sui ecosystem is experiencing its share of challenges with two major exploits in 2025. The pressing question remains whether upcoming security enhancements will match the growing sophistication of cyber attacks in the world of cryptocurrency.