Sui’s native SUI token has faced significant challenges in recent days, as it struggled to regain ground after experiencing a steep decline. Amidst allegations from South Korean regulators, the Sui Foundation, the organization behind the SUI token and the layer-1 blockchain Sui, has been accused of manipulating the token’s supply for its own gain.
The SUI token witnessed a decline of more than 9% in a short period. It fell from $0.41 on October 16 to reach new lows of $0.37 on October 18. This decline represents a 7% decrease within just two days, as reported by CoinGecko. However, in the last 24 hours, the token has managed to recover slightly, gaining a little under 1%.
In response to the allegations of supply manipulation, the Sui Foundation took to X (formerly known as Twitter) to vehemently deny these claims. The Foundation characterized the accusations as “unfounded and materially false”. It issued a statement to address the inaccuracies being reported and emphasized that there has never been any sale of SUI tokens by the Foundation after the initial Community Access Program distributions. The Foundation further stated that the circulating supply schedule displayed on its public website and available through public API endpoints is accurate.
South Korean news outlets TechM and Block Media reported that regulators from the country have initiated an investigation into the Sui Foundation. The South Korean Financial Supervisory Service (FSS) announced its intention to launch an inquiry into the distribution of the Sui token following allegations made by Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea. Rep. Min claimed that the Foundation paid itself interest by staking coins that should have remained in the non-circulating supply. This alleged action resulted in a significant decline in the token’s value, as the Foundation sold off tokens to increase circulation. Rep. Min also accused the Foundation of deceiving the public about the actual amount of tokens in circulation.
The South Korean government has been increasing its efforts to strengthen regulations concerning cryptocurrency activities in the country. In light of the collapse of Do Kwon’s Terra Money ecosystem in May 2022, the Financial Supervisory Service (FSS) anticipates introducing comprehensive crypto legislation as early as January of next year.
The struggles of the Sui token have been exacerbated by the allegations of supply manipulation. As the Sui Foundation contests these claims, the token’s price has experienced considerable volatility. However, the regulatory concerns and investigations by South Korean authorities pose a significant challenge for the Sui Foundation and its future prospects.