The native SUI token has been facing considerable challenges in recent days. After experiencing a significant drop of over 9%, allegations of supply manipulation by South Korean regulators further dampened its progress. Despite a minor recovery of just under 1% in the last 24 hours, the token fell from $0.41 on October 16 to new lows of $0.37 on October 18. This recent decline of 7% in just two days, according to CoinGecko data, has sparked concerns among investors.
Responding to the allegations, the Sui Foundation, the organization behind the layer-1 blockchain Sui, categorically denied any wrongdoing. In a statement on X (formerly known as Twitter), they criticized the accusations of supply manipulation as baseless and erroneous. The foundation emphasized that there had been no sale of SUI tokens by the organization after the initial Community Access Program (CAP) distributions, dismissing the claims as misleading. They further asserted that the circulating supply schedule displayed on their public website and available through the public API endpoints remained accurate.
Reports from South Korean news outlets, TechM and Block Media, revealed that the South Korean Financial Supervisory Service (FSS) had initiated an investigation into the Sui Foundation. The FSS intends to closely examine 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 engaging in self-interest by staking coins that were meant to stay in the non-circulating supply. He also suggested that the foundation had falsely reported the amount of tokens in circulation, which he believed contributed to the substantial decline of the Sui token.
The heightened scrutiny faced by the Sui Foundation aligns with South Korea’s ongoing efforts to regulate cryptocurrency activities following the collapse of Do Kwon’s Terra Money ecosystem in May 2022. In response to this incident, the FSS aims to introduce comprehensive crypto legislation as early as January next year. These regulatory measures seek to bring transparency and stability to the cryptocurrency market within the country, ensuring the protection of investors and the overall integrity of the industry.
The Sui token’s recent struggles have attracted attention due to allegations of supply manipulation made by South Korean regulators. While the Sui Foundation vehemently denied these accusations, the ongoing investigation by the FSS indicates a growing commitment to governing the crypto space. As South Korea aims to establish clearer regulations to address the challenges and risks associated with cryptocurrencies, investors and industry participants must stay vigilant to navigate the evolving landscape effectively.