SUI Token Struggles to Recover Amid Allegations of Supply Manipulation

Token's Value Drops 9% Following Accusations

The native SUI token has faced challenges in regaining its value after plunging more than 9% due to allegations of supply manipulation by South Korean regulators. The SUI token experienced a decline from $0.41 on Oct. 16 to new lows of $0.37 on Oct. 18. This represents a 7% decline in just two days, according to data from CoinGecko.

Sui Foundation Denies Manipulation Claims

In response to the allegations, the Sui Foundation, the organization behind the SUI token, posted a statement on X (formerly known as Twitter) on Oct. 18, calling the accusations "unfounded and materially false." The foundation emphasized that there had been no sale of SUI tokens after the initial Community Access Program (CAP) distributions and stated that the circulating supply schedule displayed on its website and public API endpoints is accurate.

South Korean Regulators Investigate Sui Foundation

South Korean news outlets TechM and Block Media reported that the South Korean Financial Supervisory Service (FSS) will launch an investigation into the Sui Foundation. Representative Min Byeong-deok, a lawmaker from the Democratic Party of Korea, alleged that the foundation had staked coins that should have remained in the non-circulating supply, resulting in self-interest payments. Additionally, Rep. Min claimed that the foundation had lied about the token's circulating supply.

Regulatory Focus on Crypto in South Korea

In the wake of the collapse of Do Kwon's Terra Money ecosystem in May 2022, South Korean lawmakers have intensified their efforts to regulate cryptocurrency activity in the country. The FSS plans to introduce comprehensive crypto legislation as early as January next year.

Cointelegraph reached out to the Sui Foundation for comment but did not receive an immediate response.