Sui Foundation Denies Insider Token Sales Allegations, Points to Potential Infrastructure Partner Involvement

In a statement released on October 15, the foundation clarified that no employees or investors from Mysten Labs, the company behind the Sui blockchain

Lightcrypto, a Web3 community focused on crypto analysis, recently brought forth allegations of insider selling concerning the Sui blockchain. In a post on October 15, they claimed that individuals involved in the Sui initial coin offering (ICO) sold around $400 million in tokens during the recent price surge, leaving a "sour taste" in the mouths of investors.

According to Lightcrypto, the astronomical rise in the Sui token (SUI) attracted attention not only for its gains but also for the disparity between the token's price and the level of development in the Sui ecosystem. This observation led them to question the actions of insiders who might have taken advantage of the price surge to sell their tokens at a premium.

"It does not bring comfort that the people building this ecosystem, the people who arguably know this token's value best, are unloading hundreds of millions of dollars of the token into less informed buyers chasing momentum," stated Lightcrypto.

While the post did not reveal specific wallet addresses, they hinted at connections between these wallets and insiders. The allegations raised questions not just about the actions of the supposed insiders but also about the potential of the Sui blockchain in relation to its soaring valuation.

In response to the allegations, the Sui Foundation released a statement on October 15 clarifying the matter. They emphasized that no employees or investors from Mysten Labs, the company behind the Sui blockchain, were involved in any token sales. The foundation highlighted the following points:

No Insider Sales: The foundation stated that its employees and any investors connected to Mysten Labs did not sell $400 million in tokens during the recent price surge. They underlined that no insiders engaged in preemptive selling or violated any lockup agreements related to token circulation.

Potential Infrastructure Partner Involvement: The foundation suggested that the wallet responsible for the alleged sales might belong to an infrastructure partner and not to insiders. They confirmed that all token lockups are handled by qualified custodians and are continuously monitored by the Sui Foundation to ensure adherence.

Encouraging Transparency: The Sui Foundation expressed a desire for more transparent discussions about the Sui ecosystem and the market dynamics that influence token sales.

The allegations of insider selling surfaced as the Sui blockchain network and its native token experienced rapid growth. According to data from DeFi Llama, SUI tokens soared by 675% over the past month, reaching a price of $1.43 on October 15.

This growth was accompanied by a surge in decentralized finance (DeFi) activity on Sui, with several protocols and applications being launched and integrated into the network. Among the key contributors to this success is the NAVI Protocol, which reported a TVL of $509 million, marking a monthly increase of 50%. Another lending platform, Suilend, saw its TVL rise significantly to $260 million, with a 78% increase over the previous month.

Adding to the growing activity in the DeFi space, the Sui Foundation recently announced that USD Coin (USDC) will be integrated into the Sui Network.

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