SUI, the native cryptocurrency of the Sui Proof-of-Stake (PoS) blockchain, plummeted to a new all-time low of $0.367 in the past 24 hours, marking a turbulent period for the Layer 1 project. As of the latest data, the price has slightly recovered to $0.377—a 5.5% decline within a single day—and is down 8.7% over the past week, according to CoinGecko.
Launched in May this year, the Sui blockchain was introduced as “the first Layer 1 and smart contract platform designed from the ground up to make digital asset ownership fast, private, secure, and accessible to everyone.” Built by former Meta engineers who led the development of the Libra blockchain and Move programming language, Sui aims to redefine scalability and user experience in decentralized ecosystems.
The SUI token plays a central role in the network’s functionality, serving three primary purposes: paying gas fees for transactions, enabling staking to secure the network, and facilitating decentralized governance. With a total supply capped at 10 billion tokens, half of the allocation is reserved for the community through the Community Reserve managed by the Sui Foundation. The remaining portion is distributed among early contributors, investors, Mysten Labs—the core development team—and various community access programs.
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Foundation Responds to Market Manipulation Claims
Amid the price downturn, allegations have surfaced suggesting that the Sui Foundation may have manipulated the token’s supply to influence market dynamics. A recent report claimed that the foundation used locked SUI reserves for staking rewards while simultaneously increasing circulating supply—an action critics argue could dilute value and pressure prices downward.
In a formal statement provided to Decrypt, the Sui Foundation firmly denied these claims, calling them “unfounded and factually incorrect statements regarding SUI token supply.” The spokesperson emphasized: “Contrary to recent speculation, the Foundation has not sold any SUI tokens after the Community Access Program (CAP) distribution.”
South Korean politician Min Byung-doo, representative of the Democratic Party, intensified scrutiny by accusing the foundation of profiting from staked tokens that should remain out of circulation. He pointed out that SUI’s price had dropped 67.1% within five months of its listing on major domestic exchanges. Min criticized the Digital Asset Exchange Alliance (DAXA) for failing to intervene, comparing their inaction to “leaving fish in front of a cat.”
He further alleged that the foundation reinvested staking rewards and sold newly earned tokens into the open market—generating an estimated $2.8 million in profit—citing a report by Cho Jae-woo, a professor at Seoul National University and DAXA advisor.
Clarifying Circulating Supply and Staking Practices
The Sui Foundation reiterated that its circulating supply schedule is fully transparent and publicly available via its official blog and API. “The circulating supply timeline published on our website is accurate,” the spokesperson confirmed. “The Sui Foundation has never liquidated any SUI tokens—including staking rewards—except as explicitly outlined in our public disclosures.”
This transparency effort aims to restore investor confidence amid growing concerns over tokenomics and long-term value sustainability. The foundation highlighted that its team comprises some of the most respected experts in distributed systems, cryptography, and programming languages—individuals with deep technical credibility stemming from their work on Meta’s Diem (formerly Libra) project and the creation of the Move language.
These foundational strengths position Sui as a technically robust contender in the competitive Layer 1 landscape, even as short-term market sentiment remains bearish.
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Regulatory Scrutiny Mounts in South Korea
South Korea, often regarded as one of Asia’s crypto hubs due to high retail adoption and institutional interest, has been tightening regulatory oversight following high-profile collapses like Terra’s UST-LUNA implosion in 2022. The Financial Services Commission (FSC) and its supervisory arm, the Financial Supervisory Service (FSS), are now evaluating whether any unfair practices—such as supply manipulation or selective information disclosure—occurred during SUI’s release and trading lifecycle.
FSS Chairperson Lee Bok-hyun stated that if evidence emerges supporting claims of market manipulation through staking or opaque disclosures, regulators will instruct DAXA to conduct formal audits. However, as of now, the FSS has not responded to media requests for comment on the ongoing situation.
This case underscores a broader trend: global regulators are increasingly focused on ensuring fairness, transparency, and investor protection in crypto markets—especially concerning token distribution models and foundation-held reserves.
Core Keywords:
- SUI token
- Sui blockchain
- token manipulation
- circulating supply
- staking rewards
- Sui Foundation
- Layer 1 blockchain
- cryptocurrency regulation
Frequently Asked Questions (FAQ)
Q: Why did SUI drop to an all-time low?
A: Multiple factors contributed to SUI’s price decline, including broader market downturns, reduced investor sentiment, and allegations of supply manipulation. However, the Sui Foundation denies any wrongdoing and attributes transparency issues to misinformation.
Q: Has the Sui Foundation sold any tokens recently?
A: According to official statements, the foundation has not sold any SUI tokens post-CAP distribution. They maintain that all actions align with their published token release schedule.
Q: What is staking in relation to SUI?
A: Staking allows users (and entities like foundations) to lock up SUI tokens to support network security and earn rewards. Critics argue that selling these rewards could increase selling pressure on the market.
Q: How is SUI different from other Layer 1 blockchains?
A: Sui is built on the Move programming language and designed for high throughput and low-latency transactions. It targets scalable ownership of digital assets through innovative object-centric architecture.
Q: Is SUI regulated in South Korea?
A: While not directly regulated yet, South Korean authorities are monitoring allegations closely. If manipulation is proven, regulatory actions via DAXA could follow.
Q: Where can I find real-time data on SUI’s circulating supply?
A: The Sui Foundation provides live updates through its public API and official blog at blog.sui.io/token-release-schedule/, ensuring verifiable transparency.
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