Allegations of supply manipulation by South Korean regulatory officials, caused a sharp fall in the price of the SUI token.
The SUI token, after the Sui Foundation, accused by South Korean regulators of manipulating the token’s supply in its interest, experienced a selloff and subsequent price decline.
The SUI token dropped from $0.41 on Oct. 16 to $0.37 on Oct. 18, resulting in a 7% decline over the past two days. CoinGecko’s data indicates that it has since gained a fraction of a percent in the last 24 hours.
On Oct. 18, the Sui Foundation, the developer of the Sui blockchain, refuted the claims of supply manipulation in a post on X.
The foundation stated that the allegations were baseless and inaccurate and added,
“We want to address some inaccuracies that have been reported today.”
It explained, “The unfounded and materially false statements surrounding the supply of SUI tokens need to be addressed. There has never been any sale of SUI tokens by the Foundation after the initial Community Access Program (CAP) distributions. Period.”
The foundation also mentioned, “The circulating supply schedule displayed on the Sui Foundation public website and available through the public API endpoints is accurate.”
The Sui Foundation’s response followed reports from South Korean media outlets TechM and Block Media that the country’s regulators had initiated an investigation into the Sui Foundation.
According to the reports, Representative Min Byeong-deok of the Democratic Party of Korea alleged that the distribution of the SUI token was unfair. He conveyed this to the South Korean Financial Supervisory Service (FSS), which will reportedly investigate the claims.
According to Representative Min, the Sui Foundation received interest payments on coins that should not have been included in the circulating supply and sold them to increase circulation, leading to a decline of more than 67% in the five months since listing.
Meanwhile, Min also alleged that the Sui Foundation lied about the amount of tokens in circulation, contributing to the SUI token’s decline.
However, the collapse of Do Kwon’s Terra Money in May prompted South Korean lawmakers to accelerate efforts to better regulate crypto in the country. The FSS is expected to introduce a comprehensive set of crypto regulations as soon as January 2023.
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