SUI Token Falls 9% Amid Supply Manipulation Speculation. SUI Foundation Denies Wrongdoing, Stresses Transparency.
Regulatory Scrutiny Amid Token Price Decline
The token, SUI, connected to the blockchain system created by former Meta employees, saw a significant 9% decrease in its value. This decline happened because the director of South Korea’s Financial Supervisory Service, Lee Bok-Hyeon, expressed concerns about potential manipulation of SUI token supply.
BlockMedia, a media outlet, pointed out that Director Lee Bok-Hyeon intends to investigate how SUI works. The focus is on understanding whether the Sui team strategically increased the token supply by using staking methods or by not providing transparent information. In blockchain terms, staking involves holding and locking up a certain amount of a token to receive rewards or support the network’s operations.
Sui Foundation’s Response to Concerns
To address growing concerns and doubts, the Sui Foundation released an official statement shared with CoinDesk. They emphasized that they haven’t sold any SUI tokens after the initial Community Access Program (CAP) distributions. The foundation highlighted their commitment to transparency, pointing to the accurate circulating supply information available on their website and through public API endpoints.
Previous Allegations and Denials
This isn’t the first time the Sui Foundation’s token practices have faced scrutiny. Earlier in June, they refuted claims from a decentralized finance (DeFi) expert, DefiSquared, who accused them of misrepresenting token emissions and selling tokens on Binance. DeFi refers to financial systems on blockchain without intermediaries.
Despite these denials, SUI’s market performance has been poor. The token is currently trading near its all-time low at around $0.3796, which is a significant drop of nearly 78% since its introduction in May, according to CoinMarketCap data.
Token Metrics Breakdown
When we look at the token metrics using token.unlocks, it shows that since the token’s beginning, they’ve made around $336 million worth of tokens accessible. This includes $72 million for staking incentives, $129 million in the community reserve, and $139 million for the community access program.
It’s important to note that investors from Series A and B will be able to access their tokens in May 2024. At that time, around $290 million in tokens are expected to be unlocked.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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