finbold.com
A Sui Foundation’s “infrastructure partner” was spotted selling $400 million worth of SUI tokens, raising market concerns and speculation. The whale has now prepared another $20 million worth of SUI in the wallet used for the ongoing selling spree.
In particular, the decentralized finance (DeFi) analyst VIKTOR identified the account ‘0xbe90d(…)’ as Sui Foundation’s alleged “infrastructure partner.” On October 14, the account received 10 million SUI after briefly stopping a consistent $400 million selling spree.
The analyst explained this whale receives tokens from two other accounts, one being the ‘0xa4da59(…),’ from this recent transaction. Notably, the origin accounts have approximately $430 million and $230 million worth of SUI in staking, supposedly under vesting contracts.
Sui responds to insider trading allegations: ‘Infrastructure partner in compliance’
On October 13, an X post by lightcrypto went viral with allegations of a Sui insider selling $400 million. Sui’s official account responded to these allegations, denying that any insider had sold this amount during the claimed period.
Yet, the response speculated that the referred account was not from an insider but an “infrastructure partner,” confirming the lockup. Sui’s account explained that this infrastructure partner is “in compliance” with the vesting rules and is overseen by a custodian.
“While the poster did not provide the wallet address, we believe the likely owner of the wallet is an infrastructure partner who owns tokens under a lockup schedule. All token lockups are enforced by qualified custodians and continuously monitored by Sui Foundation, and this partner is in compliance.”
– Sui official account on X
On that note, tokens locked in vesting contracts are usually enforced programmatically by the protocol through smart contracts, not custodians. Using trusted custodians to enforce the lockup contract goes against the decentralized and trustless nature of cryptocurrencies, raising serious concerns.
As of this writing, the Sui Foundation has not responded to Finbold’s two attempts to clarify this and other questions.
Sui locked staking rewards and monthly unlocks
Another unconventional approach of Sui tokenomics is allowing the supposedly locked tokens to stake for unlocked staking rewards.
This decision allows for over 72% of the still non-circulating supply to generate gains for what some participants call insiders.
They include the Sui Foundation, Mysten Labs, and, especially, Series A and B private investors. The last group absorbs 61% of monthly unlocks, as Finbold reported warning of Sui’s $100 million unlock in October.
In November, the market should expect another similar unlock that will put even more tokens into circulation through market sales. Previously, SUI reached an all-time high price of $2.36, sounding alarms by being ‘Overbought’ in multiple time frames.
This most recent selling spree and now expected 10 million SUI additional dump are a cautionary tale on the importance of a project’s tokenomics, which can influence the market’s sentiment and price action as supply and demand play their role in a project’s economics.