SUI, the native token of the Sui blockchain, recently hit a record low, falling to $0.367, down 5.5% in 24 hours. It fell 8.7% over the past week. The Sui Foundation faces accusations of manipulating the supply of SUI tokens, allegedly leveraging locked reserves of Sui tokens through staking to earn profits while increasing the circulating supply, leading to rapid action by South Korean regulators following the collapse of Terra, resulting in a drop in token prices Actions to avoid FUD situations in the market.​

SUI Coin accused of fraud

Representative Min Byeong-deok of the Democratic Party of Korea clarified the controversy, claiming that the foundation's actions had caused investor dissatisfaction as SUI's share price fell 67.1% in five months. In the credo, Min criticized the Digital Asset Exchange Alliance (DAXA) for not addressing the price drop and likened it to “leaving the fish to the cat.” He claimed that the foundation made profits by staking tokens that should not be in circulation and sold the received tokens on the market as interest.

The SUI Foundation denies such claims

The Sui Foundation responded by refuting the accusations, calling them "baseless and materially false." They insist that the foundation has not sold SUI tokens following the initial Community Access Program (CAP) distribution. The chairman of South Korea's Financial Supervisory Service (FSS) said the regulator could inspect DAXA if allegations of manipulation are proven.

The Sui Foundation emphasizes that the circulation supply schedule displayed on its website is accurate and has not been altered. The Sui Blockchain is developed by the technology leaders at Meta, known for the Libra blockchain and Move programming language, and is supported by respected experts in distributed systems, programming languages, and cryptography.​

South Korea's Financial Supervisory Service (FSS) is considering an inspection if allegations of manipulation and unfair disclosure are proven. In addition, Director Li also confirmed that the FSS stands ready to work closely with relevant authorities and will take decisive action if any evidence of manipulation or fraud involving Sui Coin is discovered.​

This comes as South Korea works to regulate its cryptocurrency market and prevent illegal activities following the collapse of the Terra ecosystem last year.

Impact on SUI

The SUI token has taken a negative hit after suffering a steep decline from its $1.50 peak in May, hitting an all-time low of $0.36, down 76% in 167 days. Interestingly, despite the total value locked (TVL) surging to an all-time high of $59 million, the token price did not react positively. While the SUI Foundation has awarded more than $1 million in grants to more than 15 projects, concerns about transparency persist despite news of fraud circulating.