The native SUI token has been struggling to recover its losses after a significant drop of over 9%. South Korean regulators have accused the Sui Foundation of manipulating the token’s supply for their own benefit. In the past 24 hours, the SUI token has only gained a little under 1% after falling from $0.41 to a new low of $0.37 on October 18. This represents a decline of 7% in just two days, according to CoinGecko data.
The allegations of supply manipulation were vehemently denied by the Sui Foundation in a post on X (formerly known as Twitter) on October 18. The Foundation stated that the accusations were “unfounded and materially false” and emphasized their commitment to cooperation, compliance, and transparency. They clarified that there had been no sale of SUI tokens by the Foundation after the initial Community Access Program (CAP) distributions. The circulating supply schedule displayed on the Sui Foundation’s public website and API endpoints were deemed accurate.
The response from the Sui Foundation came after reports from South Korean news outlets, TechM and Block Media, stated that regulators in the country had launched an investigation into the Sui Foundation. The South Korean Financial Supervisory Service (FSS) announced their intention to investigate the distribution of the SUI token following allegations made by Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea.
Rep. Min accused the Sui Foundation of paying itself interest by staking coins that should have been held in the non-circulating supply. He also claimed that the Foundation had lied about the amount of tokens in circulation, which he believed was the reason for the token’s significant drop. This investigation is part of South Korea’s increased efforts to regulate cryptocurrency activity, particularly after the collapse of Do Kwon’s Terra Money ecosystem in May 2022. The FSS is expected to introduce comprehensive crypto legislation as early as January next year.
Cointelegraph reached out to the Sui Foundation for further comment but did not receive an immediate response.
In conclusion, the SUI token has struggled to regain its previous value following allegations of supply manipulation made by South Korean regulators. The Sui Foundation has vehemently denied these accusations and emphasized their commitment to compliance and transparency. The investigation initiated by the South Korean Financial Supervisory Service into the distribution of the SUI token is part of broader efforts to regulate cryptocurrency activity in the country. The outcome of this investigation and the potential introduction of comprehensive crypto legislation in South Korea will likely have a significant impact on the future of the SUI token and the broader cryptocurrency market.