SUI Drops Below 0.37 USDT Amid Regulatory Scrutiny in South Korea

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The native cryptocurrency of the Meta-affiliated blockchain Sui, SUI, has seen a sharp decline in value, dropping below 0.37 USDT and falling over 10.92% in the past 24 hours. At the time of reporting, SUI was trading at 0.3645 USDT, according to market data. This sudden price drop follows reports that South Korea’s financial regulators are launching an investigation into the Sui Foundation over concerns about token supply transparency and potential market manipulation.

The scrutiny from one of Asia’s most influential crypto markets has triggered a wave of uncertainty among investors, contributing to the sell-off. But what exactly is behind this regulatory move? And how is the Sui team responding?

South Korea Tightens Crypto Regulations

South Korea has been steadily building a more structured regulatory framework for digital assets throughout 2025. A major milestone was reached on June 30, when the National Assembly passed the Virtual Asset Protection Act — a comprehensive legal package composed of 19 distinct cryptocurrency-related measures.

This new legislation grants the Financial Services Commission (FSC) expanded authority to oversee crypto exchanges, manage asset custody, and enforce compliance standards across the industry. It marks a clear shift toward greater accountability and consumer protection in South Korea's booming digital asset market.

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Building on this foundation, the Digital Asset Exchange Association (DAXA) — a consortium of South Korea’s top five exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax — announced in early July the implementation of a Virtual Asset Alert System. This real-time monitoring mechanism tracks:

When any of these red flags are detected, DAXA members are required to issue immediate alerts to users and regulators alike. The goal is to prevent market manipulation, protect retail investors, and maintain fair trading conditions across platforms.

FSS Targets SUI Over Price Collapse and Supply Concerns

The recent focus on Sui stems from comments made by Lee Bok-hyun, Director of the Financial Supervisory Service (FSS), during a parliamentary session. He confirmed that the FSS will begin developing formal standards for token listing procedures, internal controls, and transparency around issuance and circulation — all under the umbrella of the newly enacted Virtual Asset Protection Act.

More significantly, Lee specifically named SUI as a case under review.

According to Korean media reports, he responded to lawmakers’ concerns by stating that SUI has plummeted more than 67% since its debut on DAXA-affiliated exchanges five months ago. Given the severity of the drop, the FSS is now investigating whether:

If any misconduct is found, the FSS may coordinate with other authorities to impose penalties or enforce corrective actions.

This kind of targeted investigation sends shockwaves through the crypto community, especially for projects with significant trading volume in regulated markets like South Korea.

Sui Foundation Pushes Back: “No Token Manipulation”

In response to the allegations, the Sui Foundation took to X (formerly Twitter) to strongly deny any wrongdoing. In a public statement, they emphasized their commitment to compliance, transparency, and full disclosure.

“Claims of SUI token supply manipulation are baseless and factually incorrect. We have never sold any SUI tokens since the initial Community Access Program (CAP) distribution.”

The foundation reiterated three key points:

  1. No Token Sales: The Sui Foundation has not liquidated any SUI tokens — including those earned through staking rewards.
  2. On-Chain Transparency: Every token transfer made by the foundation is publicly visible and verifiable on the blockchain.
  3. Accurate Supply Schedule: The official circulating supply timeline published on the Sui website remains accurate and up to date.

They also noted that they are actively combating misinformation and fear, uncertainty, and doubt (FUD) through various communication channels and will keep the community informed about ongoing efforts.

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Why This Matters for Blockchain Projects Globally

The situation surrounding SUI highlights a growing trend: regulatory bodies are no longer treating crypto projects as fringe entities. With increasing adoption comes increased scrutiny — especially when large price drops affect retail investors.

South Korea’s approach sets a precedent. By combining legislative action with proactive monitoring systems like DAXA’s alert framework, regulators aim to balance innovation with investor protection. For blockchain teams launching tokens globally, this means:

Projects built on principles of decentralization and openness, like Sui, may find themselves better positioned to withstand such scrutiny — provided they maintain consistency between their messaging and on-chain behavior.

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Frequently Asked Questions (FAQ)

Q: Why did SUI drop below 0.37 USDT?

A: The price decline coincided with news that South Korea’s Financial Supervisory Service (FSS) is investigating the Sui Foundation over concerns about token supply transparency and potential insider selling. Market sentiment shifted negatively following the announcement.

Q: Is Sui being delisted from Korean exchanges?

A: There is no indication of delisting at this time. The investigation is still in early stages, and DAXA exchanges continue to list SUI. However, future regulatory decisions could impact trading availability.

Q: Has the Sui Foundation sold any SUI tokens?

A: According to their official statement, the Sui Foundation has not sold any SUI tokens since the initial Community Access Program (CAP) distribution. All transactions are publicly verifiable on-chain.

Q: What is DAXA’s role in monitoring cryptocurrencies?

A: DAXA monitors major Korean exchanges for abnormal activity such as extreme price swings, sudden volume spikes, or concentrated trading. If risks are detected, member exchanges must issue alerts to users and regulators.

Q: How might this affect other blockchain projects?

A: This case underscores the importance of regulatory compliance and transparent token management. As governments strengthen oversight, projects with clear governance and open supply models will likely face fewer hurdles.

Q: Where can I verify SUI’s circulating supply?

A: The Sui Foundation publishes an official token circulation schedule on its website. Additionally, all wallet movements can be audited using blockchain explorers that support the Sui network.

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Final Thoughts

While short-term price movements are often driven by sentiment, long-term project viability depends on trust, transparency, and adherence to evolving regulatory standards. The current spotlight on SUI serves as a critical test — not just for the foundation, but for how decentralized networks interact with centralized oversight.

As global regulators continue refining their approaches, projects that prioritize openness and accountability will be best equipped to thrive in an increasingly compliant digital economy.

For investors and developers alike, staying informed — and using secure, regulated platforms — is more important than ever.