- SUI token drops by 9% after speculations arise about potential manipulation of the token’s supply through staking methods.
- Sui Foundation strongly denies any wrongdoing, emphasizing transparency and adherence to initial token distribution commitments.
Regulatory Scrutiny Amidst Token Price Dip
SUI, the proprietary token associated with the blockchain architecture developed by ex-Meta employees, experienced a sharp 9% decline in value. This dip in value occurred in the wake of statements from the director of South Korea’s Financial Supervisory Service, who voiced concerns about potential supply manipulation of the SUI token.
Media outlet BlockMedia highlighted the director’s, Lee Bok-Hyeon, intentions to delve into the inner workings of SUI. The focus is on understanding if the Sui team has strategically increased token supply using staking techniques or by failing to provide equitable disclosures. Staking, in blockchain terminology, refers to holding and locking up a certain quantity of a token to receive rewards or maintain the network’s operations.
In a bid to dispel growing concerns and skepticism, the Sui Foundation issued a clarification. Through an official statement shared with CoinDesk, the foundation stated,
“In light of the baseless and inaccurate speculations regarding SUI token supply, the Sui Foundation wishes to clarify. Post the initial Community Access Program (CAP) distributions, the foundation hasn’t sold any SUI tokens. Our practices reflect our commitment to transparency, as demonstrated by the accurate circulating supply schedule available both on our public website and through public API endpoints.”
This isn’t the first instance where Sui Foundation’s token practices have come under the scanner. Earlier in June, in reaction to claims made by decentralized finance (DeFi) expert DefiSquared, the foundation denied allegations of having
“intentionally misrepresented emissions”
“offloaded tokens on Binance.”
For context, DeFi refers to financial systems and tools built on blockchain without the presence of intermediaries.
Despite the foundation’s vehement denials, SUI’s market performance paints a grim picture. The token currently hovers near its all-time low, trading at approximately $0.3796, a drastic dip of nearly 78% since its introduction in May, as per data from CoinMarketCap.
A deeper dive into the token’s metrics from token.unlocks reveals that since its inception, tokens worth $336 million have been made accessible. This includes $72 million designated for staking incentives, $129 million set aside for the community reserve, and $139 million channeled to the community access program. Notably, investors from Series A and B are poised to access their tokens come May 2024, with an anticipated $290 million in tokens set to be unlocked.