Sui Foundation Bails Out AlphaFi From Bad Debt
The Sui Foundation has stepped in to cover bad debt created by an ALPHA oracle issue at AlphaFi, preventing user funds from being affected. The misconfiguration allowed certain borrow positions using ALPHA as collateral to become substantially undercollateralized, resulting in bad debt.
The Sui Security Team identified the problem and assisted in its resolution. The foundation's intervention has kept AlphaFi solvent and protected user funds, with withdrawals remaining open but new deposits and loans paused.
The AlphaFi protocol is entering maintenance mode during the wind-down process. Existing borrowers have been asked to unwind their positions and withdraw their assets, while users can now withdraw funds directly through Slush Wallet without waiting for a lock period to expire.