Sui's native cryptocurrency, SUI token, is facing challenges in regaining its value after experiencing a significant drop of over 9%. The decline came as South Korean regulators accused the Sui Foundation of manipulating the token's supply for its own benefit. The SUI token saw its value drop from $0.41 on October 16 to a new low of $0.37 on October 18. Over the past 24 hours, it has risen slightly by just under 1%, but the current price still reflects a 7% decrease over the course of just two days, according to data from CoinGecko.
The Sui Foundation, which is responsible for the layer-1 blockchain Sui, responded to these allegations with a firm denial in a post on X (formerly Twitter) on October 18. The foundation denounced the claims of supply manipulation as "baseless and materially false" and aimed to address inaccuracies in reports. They clarified that they had never sold any SUI tokens after the initial Community Access Program (CAP) distribution, emphasizing the accuracy of the recurring supply schedule available through their public website and API.
These assertions by the Sui Foundation came in response to reports from South Korean news outlets, TechM and Block Media, which revealed that South Korean regulators are launching an investigation into the foundation. The Financial Supervisory Service (FSS) of South Korea announced its intention to investigate the distribution of SUI tokens following allegations made by Democratic Party of Korea lawmaker Min Byung-deok. Min accused the Sui Foundation of self-interest through token staking that should have been kept in the illiquid supply. He pointed out that the SUI token's value had fallen by over 67% within just five months of listing, attributing this decline to the foundation's actions. Furthermore, Min contended that the foundation had "lied about the circulating supply."
South Korean authorities have been intensifying efforts to regulate cryptocurrency activities, particularly in the wake of the Terra Money ecosystem's collapse in May 2022. Consequently, the FSS is preparing to introduce comprehensive cryptocurrency legislation in the country, expected to come into effect as early as January 2023.
