The team behind the Sui network and its native SUI token has vehemently denied accusations that they unlocked SUI staking rewards and dumped them on Binance, a popular cryptocurrency exchange. The Sui Foundation, in a five-part Twitter thread on June 27, refuted the claim, stating that they have not sold staking rewards or any other tokens from locked and non-circulating staked SUI on Binance or elsewhere. They also emphasized that all insider token allocations are compliant with their lock-ups and other transfer restrictions.
Sui is a decentralized proof-of-stake blockchain that allows users to stake their SUI tokens and participate in the network’s proof-of-stake mechanism. In return, they receive more SUI tokens, and there is no minimum staking period required.
The denial by the Sui Foundation was in response to allegations made by pseudonymous crypto commentator DeFiSquared. In a Twitter thread on the same day, they accused the foundation of dumping rewards from locked and non-circulating staked SUI tokens on Binance. DeFiSquared claimed that Sui Foundation’s wallet address “0x341f” transferred 3.125 million SUI tokens out of the 27 million staking rewards to three separate addresses, which were then sent to Binance.
While Sui argued that these specific transactions were subject to a contractual lockup, DeFiSquared contended that the SUI tokens could be unlocked without restriction. They further alleged that this process had occurred multiple times before, with most of the tokens eventually ending up on Binance. DeFiSquared proposed two possible reasons for this: to hide the selling activity or to distribute the tokens among different team members. However, they emphasized that regardless of the reasons, a significant amount of the dumped tokens found its way to Binance.
DeFiSquared’s curiosity was initially sparked in May due to the seemingly endless sell pressure on SUI tokens. They also criticized the foundation for not publishing an emissions chart separate from Binance’s launchpad, which they believed was illegitimate. Additionally, DeFiSquared accused the foundation of inflating the supply of the SUI token by approximately 20% month-on-month for non-foundation token holders, claiming that this rate surpassed the inflation rate of the hyperinflating Venezuelan Bolivar in 2022.
According to Mysten Labs, the creators of the Sui Foundation, Sui’s blockchain aims to provide high transaction throughput at low fees. The SUI token currently has a market cap of $427.7 million, with a circulating supply of about 604 million tokens. As of now, SUI is trading at $0.70, reflecting a 2.4% decrease in the past 24 hours.
In response to the allegations, the Sui Foundation stated that they will soon publish a detailed projection of the token release schedule. It is important to note that the next unlock of 61 million tokens, equivalent to $43 million, is scheduled for June 3, according to tokenomics dashboard Token Unlocks.
As the controversy between the Sui Foundation and DeFiSquared continues, the community awaits further clarification and transparency to shed light on the situation.
