Sui Blockchain Under Scrutiny: Foundation Denies $400M Insider Dump

Sui Blockchain Under Scrutiny: Foundation Denies $400M Insider Dump

Reports have emerged that the Sui Foundation allegedly sold over $400 million worth of native SUI tokens during a recent price surge, raising concerns among investors. The foundation has denied these claims, but the controversy has led to a 2% dip in the SUI price, despite the broader crypto market rally.

Insider Selling Accusations: Breaking Down the Claims

Renowned crypto analyst @lightcrypto shared on the social media platform X (formerly Twitter) that wallets connected to the Sui Foundation offloaded more than $400 million in SUI tokens. These transactions allegedly occurred during a period of rapid price gains over the past few months.

The analyst specifically pointed out that since June, a wallet address beginning with 0xbe90…950aa8 redeemed 82.6 million SUI tokens—valued at around $184 million—from a staking account with the identifier 0x7f3b…3239e4.

Further analysis revealed that these tokens were transferred in small, high-frequency transactions to major exchanges such as OKX, Binance, and Bybit. Additionally, the original staking account, 0x7f3b…3239e4, reportedly sourced its tokens from the Sui Foundation’s official address, 0x341f…17fae1.

The Sui Foundation Responds

In response to the allegations, the Sui Foundation has firmly denied any insider selling. Addressing the issue via a post on X, the foundation clarified:

“No insiders—whether employees of the Foundation, Mysten Labs (including its founders), or investors—have sold $400 million worth of tokens during this period, individually or collectively. There have been no preemptive sales or violations of lock-up agreements or the circulating supply schedule.”

The foundation also criticized the analyst, stating that @lightcrypto failed to disclose the specific wallet details. They believe that the analyst may have been referring to Sui’s infrastructure partners, whose tokens are subject to standard lock-up periods.

Market Impact: SUI’s Price Under Pressure

SUI, the native token of the Sui blockchain, has experienced a strong rally recently, reaching an all-time high of $2.34 on Monday. However, the insider selling allegations have triggered some selling pressure, resulting in a slight price dip.

Adding to the bearish outlook, popular crypto analyst Ali Martinez issued a caution to investors, advising against building new SUI positions. Martinez noted that the TD Sequential indicator—which has accurately predicted prior SUI movements—has now signaled a sell on the weekly chart. Some market analysts forecast a potential 43% price drop for SUI in the near future.

Rising Network Activity and On-Chain Metrics

Despite the controversy, the Sui blockchain has seen a significant increase in network activity, largely fueled by the growing trend of meme coin trading. According to DeFiLlama, the on-chain trading volume surged to approximately $200 million, contributing to Sui’s Total Value Locked (TVL) reaching a record high of $1.13 billion.

As the blockchain platform aims to drive global adoption through a secure and scalable infrastructure, these developments reflect the rising interest in Sui’s ecosystem. However, the unfolding situation around insider selling allegations may determine the token’s near-term trajectory.

Conclusion

While the Sui Foundation denies any wrongdoing, the insider selling allegations have raised doubts among investors, dampening enthusiasm for SUI despite its impressive rally. With analysts signaling caution, the coming weeks will be critical for the token’s performance as the market closely watches how the foundation navigates these challenges.