The SUI token has dropped to an all-time low following serious allegations of market manipulation by South Korean regulators.
The value of the token dropped by 9% after a report questioned if the supply of SUI was being manipulated via staking.
Sui Foundation Slams Allegations
SUI, the native token of the Sui blockchain, reached an all-time low of $0.367 on Wednesday, following the allegations, before making a minor recovery. The drastic fall came after new allegations of market manipulation came to light in the middle of an investigation by South Korean regulatory authorities. Authorities allege that the Sui team is manipulating the supply of the token. Several reports have reported that Lee Bok-Hyeon, the regulator’s director, has stated that authorities will inspect SUI’s behavior and check if the team has intentionally inflated the token supply.
The Sui Foundation has vehemently denied allegations of market manipulation leveled against the project and its team, taking to X to issue a clarification. The team denied any sale of SUI tokens after the initial Community Access Program (CAP). It also stressed that it is committed to transparency and compliance.
“We want to address some inaccuracies that have been reported today. 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 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.”
The company had said in June that it had not sold any staking rewards or any other tokens from locked and non-circulation SUI tokens on Binance or any other exchange. The comments were in response to decentralized finance (DeFi) researcher DefiSquared, who alleged that SUI had intentionally misrepresented emissions and dumped tokens on Binance.
South Korean Authorities To Investigate
According to reports, the South Korean Financial Supervisory Service (FSS) plans to launch an investigation into the SUI token and its distribution. This comes after allegations made by Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea. The Representative claimed that the Sui Foundation paid itself interest by staking coins that should have remained in the non-circulating supply.
“It has fallen more than 67% in the five months since listing. The issuer, Sui Foundation, received self-interest by staking (depositing) the locked-up amount and sold it to increase circulation.”
Representative Min also alleged that the reason why the SUI token had dropped was because the Sui Foundation had lied about how many tokens were in circulation.
SUI Token Struggles
Meanwhile, following the recent developments, the SUI token has plummeted, dropping over 9% in the course of a week. According to data sourced from CoinGecko, SUI fell to an all-time low of $0.367. However, the token was able to make a small recovery following this drop. Currently, the price of the SUI token is oscillating between the $0.36 and $0.39 price range and has registered a trading volume of $54 million, according to CoinGecko.
The token’s value is likely to remain subdued thanks to the investigation that will soon be initiated by the South Korean authorities. Until the allegations have been dealt with, the outlook of the token will remain negative. Lawmakers in South Korea have significantly ramped up their efforts to regulate crypto in the country following the staggering collapse of Do Kwon’s Terra ecosystem in May 2022. The FSS also plans to introduce comprehensive legislation for crypto as early as January 2024.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
