Sui has entered the spotlight after 21Shares officially submitted an application to list the first exchange-traded fund (ETF) based on the SUI token.
While the ETF proposal brings renewed optimism to the project, the recent security breach affecting the Cetus protocol has also placed scrutiny on the broader ecosystem.
These two events have shaped current market sentiment, presenting a contrasting picture of institutional growth and technical risk.
A Growing Case for Institutional Access to SUI
On 23 May 2025, 21Shares filed a formal application with the United States Securities and Exchange Commission to list an ETF that would track the performance of the SUI token.
The application was submitted via Nasdaq using Form 19b-4, which initiates the regulatory review process.
If approved, the ETF would allow institutional investors to gain exposure to SUI through regulated brokerage accounts rather than directly owning the token.
This development is not isolated. 21Shares had previously submitted Form S-1 outlining the ETF’s structure and purpose.
The product will only hold spot SUI tokens and will not use derivatives or leverage. Custody of the assets will be managed by BitGo and Coinbase Custody, providing a familiar structure to institutional investors.
Sui is a Layer 1 blockchain that uses the Move programming language, which was initially developed by Meta. It is designed to support smart contracts efficiently while keeping transaction costs low.
The architecture prioritises scalability and fast execution. These technical features have positioned Sui as a candidate for broader adoption, and the proposed ETF may reinforce this direction.
The filing has been viewed as a signal of confidence in the long-term viability of the Sui ecosystem.
Bloomberg analysts have noted that while approval may not come immediately, possibly being delayed until late 2025, the presence of multiple ETF applications involving SUI suggests that institutional interest is growing. Another firm, Canary Capital, also submitted a similar proposal recently via a different exchange.
The impact of the ETF proposal has already been reflected in SUI’s market performance. As of 28 May 2025, the token trades at approximately $3.70, marking a 6.8% increase over the previous day.
Trading volume over the last 24 hours has reached $1.28 billion, indicating that interest remains high. SUI now has a market capitalisation of $12.35 billion and a circulating supply of more than 3.3 billion tokens.
Observers have also identified a recurring chart pattern in SUI’s price behaviour. Historically, the token has experienced sharp upward moves followed by consolidation periods.
These patterns have repeated over time, and current price action appears to mirror earlier formations. Traders are closely watching whether the price will continue upward in line with previous market cycles.
Beyond the immediate trading activity, long-term volume data also supports the view that participation is growing.
According to DeFiLlama, SUI has processed more than $470 billion in total volume across decentralised and centralised platforms, with monthly averages above $18 billion.
These figures suggest that the network is experiencing meaningful engagement, a key consideration for any ETF product targeting long-term investors.
Security Incident Tests Governance and Response Capacity
The positive developments around the ETF have emerged during a period of heightened concern due to a recent security incident.
On 21 May 2025, the decentralised exchange Cetus, which operates within the Sui ecosystem, suffered an exploit that resulted in a loss of $223 million.
It was later determined that the issue stemmed from a bug in a third-party mathematical library, not from a fault in the Sui network or its core codebase.
Despite the seriousness of the breach, the Sui Foundation and its partners responded promptly. They managed to freeze approximately $160 million of the stolen funds and offered a $6 million bounty for information or assistance that could help recover the remainder.
Additionally, the foundation announced the launch of a $10 million fund to improve security practices within the ecosystem.
Sui has also taken steps to expand its bug bounty programme. Previously focused only on vulnerabilities affecting core infrastructure, the programme will now include support for protocols with total value locked exceeding $50 million.
The initiative, supported by HackenProof, aims to encourage security researchers to assist in identifying issues before they become threats. The maximum reward for critical findings remains capped at $1 million.
In parallel, a formal governance process is now underway to address the situation. Cetus has requested a protocol-level upgrade that would reclaim the frozen funds by redirecting them to a multisignature wallet held in trust.
The wallet would be jointly managed by Cetus, the Sui Foundation, and OtterSec, an auditing firm. This arrangement is intended to ensure that funds are returned to affected users in a transparent manner.
Voting on this proposal began on 27 May 2025. Under Sui’s delegated proof-of-stake governance model, validators vote on behalf of their stakers. Token holders can delegate their voting power to validators who reflect their preferred outcome.
For the proposal to pass, more than half of the total voting stake must participate, and the votes in favour must outweigh those against. The Sui Foundation’s stake is excluded from the process to ensure neutrality.
This response demonstrates the role of decentralised governance in addressing protocol-level decisions.
It also highlights the importance of coordination between protocol teams, community members, and third-party auditors in the resolution of complex events. The availability of detailed governance documentation and voting tools has been cited as a sign of maturity for the network.
Conclusion
The Sui ecosystem is experiencing a period of transformation. On one side, it is attracting institutional attention through the potential approval of an ETF that could introduce the token to a wider class of investors.
On the other hand, it is managing the aftermath of a major security incident involving a protocol built on its platform. Together, these events reflect both the opportunities and responsibilities that come with rapid growth.
While the ETF proposal may offer long-term benefits for accessibility and legitimacy, the way the network responds to internal challenges will shape its reputation just as much. Sui’s ability to act decisively, transparently, and in a decentralised manner is being tested in real time.
The outcomes of both the ETF review and the governance vote may offer clearer direction for the months ahead.