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Full Sail winds down
Full Sail, a decentralized finance (DeFi) protocol on the Sui blockchain, plans to shut down after a security incident involving oracle provider Switchboard resulted in user losses.
“Full Sail took to X on Tuesday to announce that the protocol is winding down”
Full Sail took to X on Tuesday to announce that the protocol is winding down, immediately disabling new deposits and liquidity provider (LP) reward claims.
The decision follows a security incident last week that affected Full Sail’s automated vaults after a suspected compromise of Switchboard’s oracle infrastructure, and Full Sail said it had confirmed a loss of funds and paused deposits and withdrawals while it investigated.
Switchboard said in an X post on Saturday that it was investigating a potential compromise of its Move-based implementations and had halted its network on Aptos, Sui, IOTA and Movement.
Full Sail later said an attacker removed about $91,000 from three of its vaults, while Virtue separately reported about $455,000 in losses tied to the impaired backing of its VUSD stablecoin.
Oracle compromise details
Coin Gabbar reports that the attacker exploited a signing-key vulnerability in the Switchboard oracle on August 29, and that the same Switchboard-related exploit caused Virtue Protocol to lose about $455,000 through fabricated-price liquidations.
The article says the attacker reportedly inserted a key they controlled into a live oracle feed, pushed reported prices to roughly 100 times below actual market value, deposited into vaults at those distorted rates, restored prices to normal, and then withdrew far more than they had put in.
Coin Gabbar also states that it has been clear that this was not a compromise of its own administrative keys, and that the failure originated upstream, inside Switchboard’s infrastructure.
Switchboard halted feeds on Sui, Aptos, IOTA, and Movement after detecting a potential compromise in its Move deployments, while its Solana feeds used separate code and continued operating.
On IOTA, Coin Gabbar says an attacker used a compromised oracle key to set a token price at $10 million, enabling about 4.94 million VUSD to enter circulation through Virtue and liquidating 45 users before exchanges froze related addresses and Virtue paused operations.
Repayment and broader risk
Full Sail said it will use its remaining protocol-owned liquidity to compensate users, while the team will cover any shortfall so community depositors are repaid first, and it expects to publish withdrawal and claim instructions within the coming days.
“The protocol expects to publish withdrawal and claim instructions within the coming days”
Coin Gabbar adds that Switchboard has not committed to compensation, and that Mysten Labs declined to provide financial support, while Full Sail’s shutdown announcement came early on September 2, 2026.
Coin Gabbar also reports that Full Sail repeated that it will never ask users for seed phrases or private keys, and that only its verified X account and official website should be trusted for updates.
Analytics Insight says the crypto incident disrupted four Move-based networks, and it describes how Switchboard halted feeds on those chains after detecting a potential compromise in its Move deployments.
The same Analytics Insight piece links the incident to prior Sui security history by stating that the event followed the May 2025 Cetus Protocol exploit on Sui, which caused about $223 million in losses, and that Sui validators froze roughly $162 million before those funds left the network.