Full Sail announced its protocol shutdown on Tuesday, September 1, 2026. The project decided to permanently dissolve operations after an attacker extracted approximately $91,000 across three automated vaults during a major security incident involving oracle infrastructure provider Switchboard.
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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
The platform functioned as an automated liquidity layer within the DeFi ecosystem on the Sui network. Following verification of the asset loss, management moved immediately to disable new deposits and reward claims for all liquidity providers across the protocol.
Standard liquidity pools will soon transition into a withdrawal-only mode once developers complete final verification checks. The development team formally affirmed that returning capital to affected depositors represents their foremost operational priority throughout the entire liquidation process.
Details of the vault exploit on Sui
We are investigating a security incident affecting Full Sail vaults following a suspected @switchboardxyz oracle compromise on @SuiNetwork. A loss of funds has been confirmed.
Deposits and withdrawals will remain paused until oracle integrity is restored and verified to prevent…
— Full Sail ⛵ (@FullSailFi) August 29, 2026
The protocol confirmed the initial exploit on Saturday, August 29, 2026. Project administrators quickly froze both deposits and withdrawals across all smart contracts to prevent further balance depletion while security engineers initiated a comprehensive forensic inquiry into the system.
Subsequent technical reviews revealed that the malicious actor drained assets specifically through three automated vaults. The core vulnerability did not originate within Full Sail’s internal codebase, but rather stemmed from distorted price feeds delivered by Switchboard oracle components.
Switchboard stated publicly on August 29 that it was investigating a potential exploit across its Move implementations. To mitigate immediate risks, the team halted operations across Aptos, Sui, IOTA and Movement while investigating the exact mechanism behind the corrupt feed values.
The temporary suspension of the oracle infrastructure prevented subsequent manipulation across other integrated contracts. However, the temporary pricing distortion had already allowed the attacker to execute unauthorized withdrawals against Full Sail’s automated rebalancing mechanisms.
Systemic exposure across Move ecosystems
The oracle failure extended beyond Sui to encompass other networks relying on the Move execution environment. This shared blockchain framework created unintended dependencies, exposing independent applications that utilized Switchboard as their primary source of real-time price feeds.
Virtue, a collateralized lending protocol operating on the IOTA network, experienced severe secondary damage from the breach. The platform reported that an attacker siphoned roughly $455,000 in capital, which severely degraded the asset collateral supporting its native VUSD stablecoin.
Virtue’s losses highlighted the widespread systemic vulnerability introduced by external oracle dependencies. While Full Sail and Virtue deployed entirely separate application codebases, both relied on identical data pipelines to evaluate asset collateralization and determine real-time pool balances.
User compensation plan and withdrawal roadmap
In response to the permanent wind-down, Full Sail established an orderly reimbursement framework. The organization confirmed that it will deploy its remaining protocol-owned liquidity to repay users who sustained direct financial losses across the compromised automated vaults.
Should protocol-owned assets prove inadequate to cover total community claims, founding team members pledged to fund the remaining shortfall personally. This financial arrangement ensures that independent depositors achieve full recovery ahead of any internal team distributions.
Full Sail plans to release detailed instructions outlining the formal claims procedure within the coming days. The team will maintain contract interfaces to guarantee that depositors can execute their capital withdrawals without encountering administrative hurdles or unexpected errors.
The planned dissolution of Full Sail concludes an unfortunate chapter caused by external infrastructure failures in Move chains. Affected users should monitor verified channels to ensure they submit their asset withdrawal claims before public services shut down completely.
This article is for informational purposes only and does not constitute financial advice.
