The SUI token has been one of the few altcoins to experience significant growth in 2024. This Layer 1 blockchain has surpassed Telegram’s TON to become the top-performing token by market capitalization and ROI in 2024.
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Year-to-date price growth of large-cap coins/tokens. Source: Torero_Romero
With SUI’s price surge, many investors have drawn comparisons to the previous non-EVM success story, Solana (SOL). Some have voiced concerns, speculating about the sustainability of this growth. One such voice, the Twitter user Lightcrypto, suggested caution, alleging potential insider selling by the Sui Foundation.
Lightcrypto’s Allegations of Insider Trading
Lightcrypto outlined several points regarding SUI’s price, urging the community to be wary:
Rapid Price Increase: SUI has increased fivefold from its bottom, largely driven by market sentiment seeking a winning narrative. This rapid appreciation positions SUI as a potential frontrunner in the current market cycle.
High Valuation Compared to Potential: SUI’s Fully Diluted Valuation (FDV) stands at $23 billion. Buyers at this level are betting on SUI replicating SOL’s success. However, Lightcrypto argues that while SUI’s valuation is currently a quarter of SOL’s peak, its risk-reward ratio may not be as favorable, questioning whether SUI possesses a quarter of Solana’s network development potential.
Suspicious Wallet Activity: The core of the allegation centers on a wallet, suspected to belong to the Sui Foundation, that has allegedly sold $400 million worth of tokens during the price rally. This includes significant sales at lower prices, with increased selling pressure at higher price points.
sui được rút raWallet balance showing token sales over time. Source: Lightcrypto
This implies a scenario where less-informed retail investors are buying while insiders are cashing out – a potentially detrimental situation for retail participants.
Sui Foundation’s Response: Denial and Clarification
The Sui team promptly responded to the accusations, denying the allegations of insider trading:
No Insider Involvement: The Sui Foundation categorically stated that no insiders, employees of the Foundation or Mysten Labs (including founders), or Mysten Labs investors sold $400 million worth of tokens during this period, either individually or collectively.
Unspecified Wallet Address: The Foundation pointed out that the accuser failed to provide a specific wallet address. They suggested the wallet likely belongs to an infrastructure partner holding tokens under a predetermined vesting schedule.
Token Lockup and Release: All token lockups and releases are managed by qualified custodians and overseen by the Sui Foundation, ensuring partners adhere to these conditions. The Foundation asserted that the partner in question is compliant with these terms.
Community Divided and Further Analysis
The conflicting information has divided the community. Some believe token sales by projects are commonplace and that the Sui Foundation is merely rebranding the term “insider.” Others point to the lack of concrete evidence, as the accuser did not provide a wallet address or definitive proof linking it to the Sui Foundation, rendering the accusation unsubstantiated.
Sui token unlock schedule. Source: Cryptorank.
The wallet in question reportedly holds SUI tokens designated for staking rewards. This aligns with the Sui Foundation’s claim that it’s controlled by an Infrastructure Partner engaged in staking activities. SUI’s tokenomics includes a predetermined unlock schedule of approximately 3.04% of the total supply per month (currently over $188 million at current prices). It’s possible this wallet accumulated rewards and unlocked tokens over several months, gradually selling them recently. This would indicate compliance with the Sui Foundation’s stipulated conditions.
