SUI token, the native cryptocurrency of Sui, has been struggling to regain its value after facing allegations of supply manipulation by South Korean regulators. The token experienced a significant drop of over 9%, falling from $0.41 on October 16 to new lows of $0.37 on October 18. Within just two days, the token witnessed a 7% decline, according to data from CoinGecko.
In response to these allegations, the Sui Foundation, the organization behind the layer-1 blockchain Sui, strongly refuted the accusations, calling them unfounded and materially false. In an official statement shared on X (formerly Twitter), the foundation addressed the inaccuracies and clarified its position. It stated that there had never been any sale of SUI tokens by the foundation after the initial Community Access Program (CAP) distributions, dismissing claims of self-interest. The foundation emphasized its commitment to full compliance and transparency in collaboration with DAXA and its member exchanges.
The Sui Foundation’s response was prompted by reports from South Korean news outlets, including TechM and Block Media, which indicated that South Korean regulators were launching an investigation into the foundation. The South Korean Financial Supervisory Service (FSS) announced plans to examine the distribution of the SUI token following allegations made by Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea. Min alleged that the Sui Foundation had staked coins and earned interest on them, instead of keeping them in the non-circulating supply.
Moreover, Min claimed that the foundation had misled investors about the amount of SUI tokens in circulation, leading to a significant drop in the token’s value. These allegations arise as South Korean lawmakers have been actively working to enhance regulations in response to the collapse of Do Kwon’s Terra Money ecosystem in May 2022. Consequently, the FSS aims to introduce comprehensive crypto legislation as early as January 2023.
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Cointelegraph reached out to the Sui Foundation for further comment but did not receive an immediate response.
It is worth noting that the SUI token’s struggle to regain ground and the allegations against the Sui Foundation highlight the challenges that companies in the cryptocurrency space continue to face in terms of regulatory scrutiny and investor trust. With the cryptocurrency market becoming increasingly mainstream and attracting more attention from regulators, it is essential for projects and organizations to prioritize compliance and transparent operations to maintain the trust of their users and stakeholders.
In conclusion, the SUI token’s value has been impacted by allegations of supply manipulation made by South Korean regulators. The Sui Foundation strongly denies these accusations and affirms its commitment to compliance and transparency. As South Korea seeks to enhance crypto regulations, the outcome of the investigation into the Sui Foundation’s practices could have broader implications for the cryptocurrency industry as a whole.
