The SUI token, native to the Sui Foundation’s layer-1 blockchain, has encountered a significant challenge as it grapples with allegations of supply manipulation leveled by South Korean regulators.
This regulatory scrutiny has led to a sharp decline in the value of the SUI token, with a drop of over 9% in a short span. As of the last 24 hours, there has been a modest 1% recovery in its price, but this comes after a fall from $0.41 on October 16th to a new low of $0.37 on October 18th, representing a 7% drop in just two days, according to Coinmarketcap data.
The controversy erupted when South Korean regulatory authorities accused the Sui Foundation of manipulating the token’s supply for its own advantage. In response to these allegations, the Sui Foundation, in an October 18th statement on X (formerly Twitter), vehemently refuted the claims and labeled them as “unfounded and materially false.”
The statement read, “We want to address some inaccuracies that have been reported today. The unfounded and materially false statements surrounding the supply of SUI tokens need to be addressed. There has never been any sale of SUI tokens by the Foundation after the initial Community Access Program (CAP) distributions. Period. The circulating supply schedule displayed on the Sui Foundation public website and available through the public API endpoints is accurate.”
We want to address some inaccuracies that have been reported today.
— Sui Foundation (@SuiFoundation) October 17, 2023
Sui Foundation has been and remains committed to cooperating with DAXA and its member exchanges in the spirit of full compliance and transparency.
The unfounded and materially false statements surrounding the…
These allegations came to light via South Korean news outlets TechM and Block Media, which reported that regulators from the country had initiated an investigation into the Sui Foundation. The South Korean Financial Supervisory Service (FSS) announced plans to launch an inquiry into the distribution of the SUI token, prompted by allegations made by Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea.
Min asserted that the Sui Foundation had earned interest by staking coins that should have remained in the non-circulating supply. He also contended that the foundation had misled the public about the quantity of SUI tokens in circulation.
As a result of these accusations, the SUI token has seen a significant decrease in value, with a decline of more than 67% in the past five months since its listing. Min further added that the foundation had used self-interest by staking the locked-up amount and then selling it to increase circulation.
This regulatory scrutiny is part of a broader effort by South Korean lawmakers to tighten the regulation of cryptocurrency activities within the country, driven in part by the collapse of Do Kwon’s Terra Money ecosystem in May 2022. The South Korean Financial Supervisory Service is expected to introduce a comprehensive set of cryptocurrency-related legislations as early as January 2023.
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