- South Korean Authorities raise concerns about SUI Network’s circulating supply and potential fraud.
- SUI Foundation counters accusations, emphasizing transparency and blockchain verifiability.
The Accusation on the Horizon
In a recent audit by the Government Affairs Committee, South Korean regulators raised alarms about SUI Network’s practices, specifically pointing to discrepancies surrounding the circulating supply of their token. Following a significant decline, where the token lost over 91% of its value since its mainnet launch in May, regulators, including the Financial Supervisory Service (FSC) director, suspect that the Sui Foundation may have had undisclosed self-interests in play.
Key lawmakers, such as Min Byung-deok, attributed the token’s price plummet to alleged misinformation about the token’s circulating supply. Byung-deok’s claims point to a potential inflation in circulation by the SUI Foundation through the staking of the locked-up amount and selling it.
Expanding on this, the FSC accused the SUI Foundation of deliberately unlocking and selling a portion of the token’s supply to inflate the circulating amount artificially. The oversight body for South Korea’s crypto space, the Digital Asset Exchange Alliance (DAXA), also came under fire for allegedly not scrutinizing SUI’s claims closely.
Given the circumstances, FSC Director Lee Bok-hyun called for stricter oversight, noting the limitations of the current Virtual Asset User Protection Act. Lee emphasized the pressing need for more comprehensive regulations to maintain a level of trust with consumers.
SUI’s Stance: Transparent and Verifiable
In the face of these mounting allegations, the SUI Foundation took a firm stance, labeling the claims by South Korean authorities as “unfounded” and emphasizing their commitment to transparency.
Communicating through X (a platform akin to Twitter), the Foundation clarified its position, stating that it had neither engaged in any liquidation of SUI tokens nor in receiving them as staking rewards. To bolster their point, the foundation urged critics and the public to verify all SUI token transfers on the blockchain, an immutable and transparent ledger, reinforcing the verifiable nature of their operations.
As the crypto and blockchain space continues to evolve, the balance between regulation, innovation, and trust remains a challenge that all stakeholders must navigate.
