Full Sail DeFi protocol on Sui to shut down after oracle-related attack

Full Sail, a decentralized finance (DeFi) protocol built on the Sui blockchain, announced it will shut down after an attacker stole about $91,000 from three of its automated vaults. The incident was linked to a suspected compromise of oracle provider Switchboard, which supplies external data to blockchain applications.

Protocol disables deposits and prepares for withdrawals

Full Sail said on Tuesday it would immediately disable new deposits and claims for liquidity provider rewards. After final security checks, regular pools will switch to withdrawal-only mode. The team stated that compensating users is its top priority.

The protocol plans to use its remaining funds to repay affected users, with the team covering any shortfall to ensure community depositors are repaid first. Withdrawal and claim instructions are expected to be published in the coming days.

Switchboard halts networks during investigation

Switchboard, the oracle service involved, reported on Saturday that it was investigating a potential compromise of its Move-based implementations. As a precaution, it halted its network on Aptos, Sui, IOTA, and Movement blockchains.

Full Sail first disclosed the incident on Saturday, confirming a loss of funds and pausing deposits and withdrawals. Another protocol, Virtue, a stablecoin lending platform on IOTA, separately reported about $455,000 in losses and said the backing of its VUSD stablecoin had been impaired.

What is confirmed

• Full Sail is shutting down after an attack linked to Switchboard’s oracle infrastructure.
• An attacker removed about $91,000 from three of Full Sail’s vaults.
• Switchboard halted its networks on Aptos, Sui, IOTA, and Movement during its investigation.
• Virtue reported $455,000 in losses and impairment of its VUSD stablecoin backing.
• Full Sail will use remaining funds and team resources to compensate users.

Why it matters

Oracle providers like Switchboard are critical for DeFi protocols, as they supply external price data needed for smart contracts to function. A compromise in an oracle can lead to incorrect pricing, enabling attackers to exploit vulnerabilities in automated systems like vaults and lending pools.

Sources

• Cointelegraph