Full Sail DeFi protocol shut down after Sui network was attacked by a $91,000 hacker

Crypto Hack News: Full Sail announced its withdrawal from the Sui Network after the oracle vulnerability

In the early morning of September 2, 2026, the Sui ecosystem project Full Sail confirmed that it would cease operations due to a costly oracle vulnerability attack. Just a few days ago, attackers used price data manipulation from Switchboard, a oracle provider used on multiple Move language blockchains, to steal funds from a pool of funds. The same underlying vulnerability also affected Virtue Protocol, making it one of the most serious oracle security incidents affecting the Sui and IOTA ecosystems this year.

Overview

Full Sail, a DeFi protocol based on the Sui network, announced its orderly shutdown and cessation of operations. On August 29, attackers used the Switchboard Oracle Signature Key Vulnerability to steal approximately $91,000 from three funding pools. The same Switchboard-related vulnerability caused Virtue Protocol to lose approximately $455,000 due to false price clearing. Full Sail will use its own agreed liquidity and team funds to fully repay affected depositors;Switchboard has not yet committed compensation, and Mysten Labs has refused to provide financial support. Withdrawal and claim statements are expected to be released in the next few days.

Full Sail announces shutdown after Switchboard oracle bug

On August 29, attackers controlled the way Oracle price updates were authorized and stole nearly $91,000 from three funding pools. Direct liquidity pool positions were reportedly unaffected. Full Sail suspended affected products and launched an investigation after confirming the vulnerability. The team now believes that an orderly exit is the safest way to protect remaining users and agreement funds.

How a Switchboard oracle vulnerability caused Full Sail to be attacked

According to Full Sail, the root cause lies in Switchboard's production code, which controls who has the right to sign oracle price updates. The attacker allegedly inserted a key he controlled into an active oracle data source. They then lowered the reported price to about 100 times the actual market value, deposited it into the pool at these distorted ratios, restored the price to normal levels, and then withdrew far more funds than they had deposited. What is clear is that this is not that Full Sail's own management key has been compromised, but that there is a problem within the upstream Switchboard infrastructure.

Comparison of Full Sail attack losses and Virtue Protocol impact

Full Sail was attacked in three funding pools, reported losses of approximately US$91,000, and its current status is closed. Virtue Protocol had 45 users liquidated, reported losses of approximately $455,000, and the agreement has been frozen. The Switchboard oracle implementation was compromised, which is an upstream security incident and is currently under investigation. The comparison shows that Full Sail's crypto hacking news was not an isolated incident, but part of a broader oracle failure that affected multiple protocols that relied on Switchboard price data.

Full Sail is closed: The team promises to fully compensate depositors

Full Sail will use the liquidity and team funds in its own agreement to make up for the gap, and community depositors will receive priority compensation. New deposit and LP reward withdrawal features have been disabled, and funds pools remain suspended until final security checks are completed. The team expects regular pools will soon enter withdrawal-only mode, and detailed withdrawal and claims guidelines will be released within a few days.

Switchboard and Mysten Labs face support challenges

As of September 1, Switchboard has not announced the specific technical details of its code failure, the total scope of users affected, nor has it provided a fix to prevent the recurrence of the event. Switchboard also made no commitment to compensation. Full Sail contacted Mysten Labs, the organization behind the Sui network, seeking financial assistance, but the request was denied. Full Sail said the lack of this information will not affect its users 'withdrawal or repayment process.

Virtue Protocol reports that the same oracle event resulted in US$455,000 damage

Virtue Protocol revealed that 45 users were liquidated after an attacker gained control of Switchboard's oracle signing key on an IOTA deployment. The attackers manipulated prices in both directions, first forging debt and then triggering liquidation, and approximately $455,000 in debt was erased through liquidation. Virtue clarified that its clearing robot was operating normally based on the false prices it received and had not been compromised. At present, the agreement has frozen loans, deposits, withdrawals, clearing and flash loans, and repair work is still in progress.

Full Sail shutdown timeline: from the vulnerability on August 29 to the cessation of operations on September 2

August 28 to 29: Switchboard-related oracle vulnerability affects multiple chains;Virtue reports that IOTA prices have been manipulated and liquidation occurred. August 29: Full Sail discovers the incident and suspends its funding pool, and approximately $91,000 is withdrawn. August 30: Switchboard issued a preliminary public statement recommending temporary migration to other providers. September 1: Full Sail confirms that it has not received technical disclosures or compensation commitments from Switchboard. September 2: Full Sail officially announced that it would close its encryption business on Sui and give priority to repaying users.

What happens next for Full Sail users on the Sui network?

Affected users should wait for official withdrawal and claim instructions and not trust unverified links. Full Sail has repeatedly emphasized that it will never require users to provide seed phrases or private keys, and only its verified X accounts and official websites can be trusted. A more detailed incident report and the underlying reasons for the team's shutdown are expected to be released in the next few days.

Conclusion

News of Full Sail's shutdown on the Sui ecosystem highlights the growing risk in DeFi: the protocol itself may be financially sound, but it may still fail due to loopholes in the third-party infrastructure it relies on, such as Oracle. As Virtue faces similar consequences, the incident may prompt closer scrutiny of oracle security standards on the Move language chain.

Disclaimer : This article is for reference only and does not constitute financial, investment or legal advice. The cryptocurrency market is highly volatile and poses significant risks. Before making any financial decisions, be sure to study for yourself.