Nemo Protocol Exploit Steals 2.4 Million And Tests DeFi Security

The Nemo Protocol exploit on the Sui network is yet another case showing how exposed DeFi protocols still are. Roughly 2.4 million in stolen funds, mostly USDC, were taken after attackers found a weakness in Nemo’s smart contracts. They then shifted the stolen funds across chains to cover their tracks, moving from Sui to Arbitrum and finally to Ethereum using Circle’s bridge. This type of cross-chain laundering has become a common signature of DeFi exploits and continues to challenge investigators who try to follow the money.

How Smart Contract Weaknesses Enable DeFi Exploits

Nemo itself is a yield trading platform. It lets users deposit assets and take positions on whether lending rates will rise or fall. In DeFi, everything operates through smart contracts, which are self-running programs. This automation makes DeFi efficient and appealing. But even a tiny coding error can cause massive losses. In this case, the smart contracts became the weak point. Once the attacker found a way in, extracting the funds and disguising them across networks was straightforward.

The scale of this single exploit is concerning, but the broader pattern is worse. DeFi exploits already account for about 80 percent of all crypto losses in 2025. More than 2.17 billion has been stolen this year, and each month seems to add fresh cases. August alone saw 163 million drained across 16 separate attacks. The Nemo incident was followed almost immediately by a 27 million exploit on Venus Protocol and an 8.4 million hit on Bunni DEX. Earlier in the year, Cetus Protocol, also on Sui, lost 260 million. ByBit’s 1.5 billion breach still stands as the largest, but these smaller, repeated strikes show how constant the pressure is.

Cross-Chain Bridges as Key Targets in DeFi Exploits

Cross-chain bridges allow users to transfer assets between different blockchain networks. This makes them very convenient for users. But because they hold large amounts of funds in one place, they become prime targets for hackers. Criminals exploit the complexity of DeFi systems. They move stolen assets across multiple blockchains to avoid being caught. In 2022, bridge exploits alone made up 69 percent of stolen funds. This has been over 2 billion dollars across 13 incidents. The Nemo case fits that same mold and reinforces why bridges are such high-value targets.

When Cetus was drained earlier this year, the SUI token fell about 5 percent. Losses on Nemo are smaller in comparison, but repeated incidents on the same network amplify concerns. Many users now spread assets across different protocols or only test with small amounts, reflecting growing caution.

Security Measures Protocols to Prevent Exploits

For DeFi protocols themselves, the lessons have been repeated enough times. Thorough audits, bug bounty programs, gradual rollouts, and hack insurance are no longer optional. Still, the push to innovate fast and attract users often leaves security on the back burner. That trade-off is proving costly.

At the industry level, the response is moving slowly. Better security standards are being discussed, along with real-time monitoring tools and formal verification of code. Regulators are also watching more closely as losses mount. Each DeFi exploit makes the case for tighter oversight stronger, and the calls for regulation will only grow louder. Insurance products are also likely to expand, giving users some protection but also forcing protocols to meet minimum security requirements before qualifying.

Balancing Innovation and Security in the DeFi Ecosystem

DeFi opens up new financial opportunities, but relying on smart contracts brings risks that traditional finance doesn’t have. The total value locked in DeFi is still around 48 billion, showing strong demand for these products. Yet security keeps falling behind innovation. It adds to the evidence that the industry must slow down, prioritize security, and earn back user confidence. Innovation can’t keep outpacing trust. Without stronger foundations, the next exploit is not a question of if, but when.