AlphaFi winds down after an ALPHA oracle misconfiguration. Sui Foundation support helps maintain protocol solvency. Withdrawals remain open for AlphaFi and Slush users. Sui DeFi protocol Alph
Sui DeFi protocol AlphaFi has started winding down operations after an ALPHA oracle misconfiguration created bad debt in its lending platform. The Sui Foundation’s security team identified the issue and helped resolve the situation. AlphaFi confirmed that all bad debt has been covered and user funds remain safe.
The Sui DeFi protocol entered maintenance mode, stopping new deposits and loans while keeping withdrawals available. The move affects AlphaLend, the platform’s lending service built on the Sui ecosystem.
The Sui DeFi protocol issue originated from borrow positions backed by ALPHA token collateral. AlphaFi said some positions became significantly under-collateralized, creating debt that required additional support.
Following the Sui Security Team’s identification of and assistance with the resolution of @AlphaFiSUI 's misconfiguration of their ALPHA oracle and subsequent creation of bad debt, AlphaFi is winding down operation of their protocol.Sui Foundation has made the decision to… https://t.co/7m62iqYhnC
— Sui (@SuiNetwork) September 25, 2026
The Sui Foundation provided assistance to ensure AlphaFi remained solvent after the problem was identified. The foundation’s security tools helped detect the oracle misconfiguration, which affected collateral valuation and lending operations.
AlphaFi said users do not face losses from the incident. Existing borrowers can unwind positions and withdraw their assets, while new borrowing activity remains disabled during the wind-down process.
The protocol’s total value locked was reported at about $63.5 million before the announcement. AlphaFi has also started cooperating with the ongoing investigation and recovery efforts.
The Sui DeFi protocol transition includes changes for Slush Strategy users. Slush advised users to withdraw funds from SUI, WAL, DEEP and USDC strategies connected to AlphaFi.
Withdrawals are available immediately without previous waiting periods. Users with pending requests were instructed to cancel and resubmit withdrawals to receive funds instantly.
AlphaFi also discontinued its ALPHA vault and removed withdrawal lock periods. The protocol will continue overseeing the wind-down process while users exit remaining positions.
The Sui Foundation said its security tooling will later become available as a public resource for DeFi protocols on the Sui network.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.<p>The post Sui DeFi Protocol AlphaFi Winds Down After Oracle Debt Issue first appeared on Coin Crypto Newz.</p>
