SUI price falls to new lows amid Korean regulator investigation

On October 18, the price of the Sui blockchain token (SUI) reached a low of $0.36 — a drop of 82.4% from the ATH. The negative trend had persisted since the launch of the coin, but in recent days it intensified after news of South Korean authorities’ interest in the Sui Foundation.

On the eve of the decline, the head of the Financial Supervisory Service (FSS) Lee Bok-hyun, in remarks before the House of Representatives, announced an upcoming investigation into certain foreign cryptocurrencies and their issuers, notably the Sui Foundation, according to the local publication Block Media.

To designate Western digital assets, the official used the term ‘burger coins’, and for locals — ‘kimchi coins’.

The head of the FSS responded to a warning from Democratic Party member Min Ben Dok that the Sui Foundation manipulated the supply of SUI for personal gain.

According to him, the Foundation blocked in staking tokens that should not be in circulation, and profited from this. He also claims that the organization unlawfully increased the asset’s issuance by selling the earned coins.

“SUI, which is listed on five domestic exchanges, fell by 67.1% over five months since listing. The Korea Digital Asset Exchange Alliance (DAXA) — comprising five trading platforms — Upbit, Bithumb, Coinone, Korbit, Gopax — has taken no action to counter the decline in prices, which has caused significant investor dissatisfaction,” added Min Ben Dok.

The speaker cited a report by a Hansung University professor and a DAXA adviser Cho Je-u, according to which “the Sui Foundation’s profit earned as interest amounts to $2.8 million.”

The expert’s analysis also showed that the Foundation allegedly sold “a large amount of SUI” on the over-the-counter market weeks before listing.

The head of the FSS pledged to verify the supply-manipulation data and then reach out to the Alliance for further information.

“With regard to the equity side, checks are conducted related to secondary and primary markets, listing or delisting, and there exists a ‘Chinese wall’. I have strong doubts about the existence of this wall at DAXA and at some individual exchanges,” Bok Hyun added.

Sui Foundation representatives rushed to rebut the Korean officials’ accusations and pointed to “some inaccuracies”.

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…

— Sui Foundation (@SuiFoundation) October 17, 2023

“The organization remains committed to cooperating with DAXA and its members in the spirit of full compliance and transparency. The Foundation has never sold SUI tokens after the initial distribution under the Community Access Program,” the statement said.

All charts and circulating-supply data are always shown on the public site, the Sui Foundation reminded. The issuer highlighted three main points:

• The fund has never liquidated any SUI tokens, including staking rewards;
• Each transfer of tokens by the organization is public and verifiable on the blockchain;
• The company acted consistently and transparently, publicly providing information about issuance.

“The Foundation actively fights misinformation and FUD across various channels and will keep the community informed of these efforts,” the Sui Foundation summed up.

However, some community members questioned the issuer’s “transparency and consistency.” One user noted that the foundation published the token release schedule only two months after the mainnet launch.

In addition, he noted that the Sui Foundation mentioned a public site but did not provide a link to it. On the blockchain’s official page, there is only a chart showing the circulating-supply estimate for the next seven years.

According to DeFi Llama, at the time of writing the total value locked in Sui stands at $59.17 million. Unlike the coin price, this metric has been setting new highs almost daily over the past several months.

Earlier, a trader under the pseudonym DeFi^2 accused the Sui Foundation of selling staking rewards on Binance and violating the asset unlock schedule. At the time, project representatives said that adding SUI liquidity to the market was proceeding “as planned”.

In August, the Mysten Labs team behind the Sui ecosystem implemented the liquidity staking function.