SUI Coin is currently under investigation by the Financial Supervisory Service (FSS) for allegedly providing false information about its circulation volume and staking profits. This investigation stems from concerns raised by Democratic Party lawmaker Min Byung-deok during a Government Affairs Committee audit. Min Byung-deok pointed out that SUI Coin has experienced a significant decline in value, falling more than 67% since its listing in May 2023. He claimed that the Sui Foundation, the issuer of SUI Coin, increased circulation by staking and selling locked-up coins, thus profiting at the expense of investors. The inaccurate information provided by SUI Coin about its circulation volume affected its market capitalization and ranking.
Min Byung-deok also criticized the Digital Asset Exchange Joint Consultative Body (DAXA), consisting of five major exchanges responsible for listing SUI Coin, for not taking any action against these violations, despite having their own guidelines in place.
In response to these allegations, Director Lee Bok-hyun of the FSS acknowledged issues with SUI Coin's distribution volume and disclosure practices. The FSS has requested that DAXA take action to regain consumer trust, and they are prepared to collaborate with relevant authorities and take necessary actions if there is evidence of manipulation or fraud by SUI Coin. This investigation highlights the growing regulatory scrutiny in the cryptocurrency space to protect investors and maintain market integrity.