The Sui Foundation was recently embroiled in a controversy after it was accused of dumping locked and non-circulating SUI tokens on the popular crypto exchange Binance.
However, the foundation vehemently denied these allegations, saying that no such actions were taken.
The Sui Foundation reassures its crypto community: no locked tokens were sold on Binance
In a series of tweets on 27 June, the Sui Foundation responded to the allegations and clarified that none of the blocked or uncirculated tokens, including SUI staking rewards, were sold on Binance or any other platform.
They stressed their commitment to comply with lock-up agreements and other restrictions on the transfer of insider token allocations.
This response came after pseudonymous cryptocurrency commentator DeFiSquared had spoken out on Twitter, claiming that the Sui Foundation had dumped the rewards of locked and uncirculated SUI tokens onto Binance.
While Sui clarified that the specific transactions in question were subject to a contractual lock, DeFiSquared insisted that the tokens could be unlocked without restriction.
According to DeFiSquared, the Sui Foundation’s wallet address “0x341f” allegedly transferred 3.125 million SUI out of a total of 27 million staking rewards to three different addresses, which eventually ended up on Binance.
The commenter suggested that this process occurred multiple times, with most of the tokens ending up on the exchange.
The allegations toward the Sui Foundation
The allegations raise questions about the pressure to sell SUI tokens, which according to DeFiSquared had been ongoing for some time.
They also questioned the legitimacy of Binance’s launchpad and accused the foundation of inflating the supply of SUI tokens by about 20% month-on-month for non-foundation token holders, comparing it to the hyperinflation of the Venezuelan Bolivar in 2022.
In response to these allegations, the Sui Foundation reiterated the purpose of its blockchain, emphasizing its ability to provide high transaction flow at low fees.
They expressed their commitment to transparency and announced their intention to publish a detailed projection of the token release schedule in the near future.
Currently, the SUI token has a market value of $427.7 million, with a circulating supply of approximately 604 million tokens, according to CoinMarketCap. At the time of writing, SUI is trading at $0.70, registering a 2.4% decline over the past 24 hours.
Token Unlocks, a tokenomics dashboard, indicated that the next unlock of 61 million SUI tokens, worth $43 million, is scheduled for 3 June.
As the allegations and denials continue, it remains critical for investors and stakeholders to closely monitor developments and assess the veracity of the allegations made against the Sui Foundation.
The impact of these allegations on the reputation and market performance of the SUI token will undoubtedly be significant, underscoring the importance of transparent communication and adherence to agreed-upon protocols within the crypto community.
The effects of the allegations in the crypto community toward Sui
The allegations and subsequent denials regarding the actions of the Sui Foundation have undoubtedly sparked a sense of uncertainty within the crypto community.
While investors and stakeholders await further clarification, it is essential to consider the potential ramifications on the reputation and market performance of the SUI token.
A major concern raised by DeFiSquared has been the seemingly endless selling pressure on SUI tokens.
This selling pressure, coupled with the alleged inflation of the token supply, could lead to a loss of confidence among investors.
If token holders perceive that the market is flooded with SUI tokens, this could undermine the value and demand for the cryptocurrency.
In addition, allegations of dumping locked and uncirculated SUI tokens on Binance raise questions about the integrity of the Sui Foundation’s actions.
Transparency and compliance with lock-up agreements and agreed-upon restrictions are critical to building trust in the cryptocurrency ecosystem.
Any deviation from these agreements could erode the credibility of the project and the foundation behind it.
The impact of these allegations goes beyond the Sui Foundation and the SUI token. Binance, one of the world’s leading cryptocurrency exchanges, finds itself indirectly involved in this controversy.
If the exchange is found to have facilitated the sale of blocked rewards, it could face scrutiny and reputational damage, with potential legal consequences.
In light of these allegations, it is imperative that the Sui Foundation provide clear and complete evidence to refute the claims made against it.
It must address the specific transactions at issue and demonstrate that the tokens remain blocked or that their transfer was carried out in accordance with agreed restrictions.
Failure to present convincing evidence could deepen suspicions and increase skepticism about the foundation and its practices.
Source: https://en.cryptonomist.ch/2023/06/28/crypto-sui-responds-allegations-binance/