The Sui Foundation, the team behind the Sui network and its native SUI token, recently took to Twitter to address allegations of selling locked staking rewards on Binance. Pump and dump schemes have become increasingly prevalent in the crypto world, with Chainalysis reporting that 24% of tokens launched in 2022 saw a price decline in the first week, suggesting possible pump-and-dump activity.
The Sui Foundation vehemently denies the claims and asserts that they have not sold any staking rewards or other tokens from locked and non-circulating staked SUI on Binance or any other exchange. They assured the public that all insider token allocations are compliant with their lock-ups and restrictions on transfer.
Despite the refutation, rumors began circulating on Twitter suggesting that the Sui Foundation was unlocking and dumping locked staking rewards on Binance. A popular crypto trader and commentator known as @DefiSquared further fueled the speculation by stating that the foundation had manipulated “locked” and “non-circulating” staked SUI. According to @DefiSquared, the Sui Foundation allegedly has nearly 3 billion non-circulating and locked SUI staked, six times more than the entire circulating supply.
To support the allegations, @DefiSquared presented on-chain data demonstrating the transfer of millions of SUI rewards, with the majority ending up on Binance. For instance, a transaction on May 31st showed the transfer of 2,500,000 SUI rewards from one address to another. The Sui Foundation, however, clarified that this transaction was a payment subject to a contractual lockup, dismissing any impropriety.
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Sui utilizes a proof-of-stake consensus mechanism for its blockchain. Its mainnet went live on May 3rd, enabling users to stake their Sui tokens and participate in the proof-of-stake mechanism to earn more SUI.
Despite these developments, the Sui Foundation has yet to publish a token release schedule, more than two months after the mainnet launch. According to @DefiSquared, the token supply is increasing daily, contrary to the data reported by CoinMarketCap, which only shows emissions once a month. This disparity implies a rough 20% inflation rate for non-foundation SUI token holders. To address concerns, the Sui Foundation plans to release an official projection of the SUI token vesting and distribution schedule soon.
As a result of these controversies, the SUI token’s price has experienced a decline of more than 14% over the past seven days. Additionally, a release of 61 million tokens is scheduled for June 3rd.
In conclusion, the Sui Foundation firmly denies the allegations of selling locked staking rewards on Binance. While rumors and data analysis by @DefiSquared have fueled speculation, the foundation maintains that all their token allocations comply with lock-up agreements. However, concerns regarding the publication of the token release schedule and the SUI token’s inflation rate remain. The foundation plans to address these concerns by sharing an official projection of the token vesting and distribution schedule. As the situation unfolds, market participants and SUI token holders eagerly await further updates from the Sui Foundation.
