TL;DR
- Full Sail announced the shutdown of its DeFi protocol on Sui following an attack linked to oracle provider Switchboard that caused losses.
- An attacker drained approximately $91,000 from three automated vaults; the Virtue protocol also reported losses of $455,000 in the same incident.
- The Full Sail team committed to compensating users with the protocol’s remaining liquidity and covering any deficit with its own funds.
Full Sail, a decentralized finance protocol built on the Sui blockchain, announced through its X account that it will permanently cease operations.
The decision was made as a direct consequence of a security incident linked to Switchboard, an oracle provider, which resulted in losses for the protocol’s users. Immediately, the team disabled new deposits and reward claims for liquidity providers, while regular pools will transition to a withdrawals-only mode once final security checks are completed.
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Full Sail is sunsetting on @SuiNetwork.
This was a difficult decision. Our immediate priority is returning what affected users lost and completing an orderly wind down.
— Full Sail ⛵ (@FullSailFi) September 1, 2026
Full Sail’s Collapse and the Team’s Response
The incident became public on Saturday, when Full Sail confirmed the loss of funds and suspended deposits and withdrawals while investigating what had occurred. Provider Switchboard announced that same day, through a post on X, that it was investigating a possible breach of its Move-based implementations and had halted its network on the Aptos, Sui, IOTA, and Movement blockchains. Suspicion pointed to an exploit of the oracle infrastructure that directly affected Full Sail’s automated vaults.
Multiple Protocols Were Hacked
According to information published by the team itself, an attacker managed to withdraw approximately $91,000 from three vaults of the protocol. Although the figure may seem limited, the impact of the same incident extended to other projects within the ecosystem. Virtue, a stablecoin lending protocol based on IOTA, reported losses of around $455,000 and noted that the backing of its stablecoin VUSD had been compromised as a direct consequence of the attack.
Faced with this situation, Full Sail outlined its compensation plan: the protocol’s remaining liquidity will be allocated first to affected users, and the team will cover with its own funds any deficit that remains, prioritizing reimbursement of community depositors.
Specific instructions for making withdrawals and claims will be published in the coming days. The shutdown marks an abrupt end for a protocol whose exposure to an external infrastructure vulnerability proved impossible to absorb.
