The South Korean regulator claims that Sui Network developers lied about some aspects of the token, so the FSC intends to conduct an investigation to determine whether Sui Network is operating as a scam. The department’s main complaint is a sharp drop in the SUI token, which may be associated with false statements by the project regarding the number of tokens in circulation.
“The price of Sui Coin fell because the developers lied about the number of tokens in circulation, but now they are not raising the issue. It has fallen more than 67% in the five months since listing. The issuer, Sui Foundation, benefited by staking a certain amount and sold it to inflate turnover,” said Democratic Party lawmaker Min Byung-deok.
The regulator also criticized the Digital Asset Exchange Alliance (DAXA), which includes major cryptocurrency exchanges in South Korea, for not checking SUI turnover. No action was taken against SUI even though the project clearly violated the guidelines set by the alliance. FSC Chief Executive Lee Bok-hyun called on DAXA to take the necessary measures to restore user trust. If the department identifies manipulations with the volume of tokens, which could be done through staking or false statements, strict measures will be taken.
The SUI Foundation called the government’s claims unfounded and said it did not liquidate these tokens, including those received as staking rewards. All transfers of SUI tokens can be verified on the blockchain. In addition, the fund published a token circulation schedule.
Lee lamented that the recently passed Virtual Asset User Protection Act lacks important provisions on oversight of primary markets and exchanges, so he believes it is necessary to discuss them with legislators. The FSC recently announced that it is already preparing additional rules regarding the listing of crypto assets on trading platforms.
Source: Bits
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