- The Sui Foundation refuted claims of $400 million in insider trading, clarifying that the sales in question were made by an infrastructure partner and adhered to the project’s token lockup schedule.
- Despite this, the allegations impacted SUI’s market, leading to a 5% price drop.
The Sui Foundation, the organization behind the SUI blockchain, recently found itself in the midst of controversy when allegations surfaced regarding the sale of $400 million worth of SUI tokens by insiders. However, the foundation has quickly debunked these claims, providing clarification about the situation. Here’s a closer look at what happened and how the foundation responded.
The Allegations: $400M in Insider Sales?
On October 14, a pseudonymous crypto trader and analyst, known as Lightcrypto, made waves on X (formerly Twitter) by highlighting unusual activity surrounding the surge of SUI’s native token. The token had experienced a 96% rise in value over the past month, leading to a $23 billion fully diluted valuation (FDV) at its peak.
This dramatic rally raised eyebrows, with Lightcrypto questioning the fundamental value behind SUI’s rally. He argued that the token’s growth didn’t reflect its true potential compared to other cryptocurrencies like Solana (SOL).
In his analysis, Lightcrypto alleged that insiders, including a large foundation wallet, were offloading SUI tokens worth $400 million throughout the rally. These sales, he claimed, were happening at increasing rates as the price surged, leading to concerns that those most informed about the project’s true value were cashing out while the market chased momentum.
Sui Foundation’s Response
In response, the Sui Foundation quickly addressed these allegations. According to the foundation, none of its employees, core contributors, or investors—such as those from Mysten Labs—are involved in unauthorized sales of SUI tokens. They further clarified that any token releases are in line with the project’s pre-defined lockup schedule.
The foundation acknowledged that the wallet address involved in the alleged sales could belong to an infrastructure partner rather than an insider. The foundation emphasized that the sales align with Sui’s supply schedule, which is strictly monitored and enforced by qualified custodians.
Despite the foundation’s swift response, the allegations have impacted SUI’s market performance. Following the news, the token experienced a 5% drop, falling to $2.13 after reaching highs earlier in its rally. However, the Sui Foundation’s commitment to transparency and compliance with its supply schedule provides some reassurance to investors.
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