Sui Foundation has ended its relationship with the decentralized exchange MovEX following a breach of contract. The foundation alleged that MovEX had released a significant amount of SUI tokens – subject to a contractual lockup – into circulation.
Sui Foundation Terminates Relationship With MovEX For Unlocking 2.5 Million Tokens
On July 26, 2023, the Sui Foundation released a blog post, explaining the network’s token supply and the essence of its token release schedule. The foundation also announced the termination of its relationship with MovEX after breaching its token lockup contract.
According to the foundation, early contributors to the network received SUI tokens that were subject to a lockup period – only to be released based on a preset schedule. MovEX was one of the recipients of this token allocation, collecting 2.5 million SUI tokens as payment for its contribution to the exchange product DeepBook.
However, the decentralized exchange (DEX) was found to have violated the token lockup by moving its entire allotment of tokens in three (625,000 SUI) transactions to three separate wallets.
At the time, these transactions raised questions about the Sui Foundation, with some tweets implying that the foundation “intentionally misrepresented” the token emissions schedule. The foundation denied these claims and has further clarified in its latest post that it didn’t consent to the three transactions by MovEX.
As a result of these events, the Sui Foundation has cut off ties with the decentralized exchange. It also confirmed that no additional SUI tokens will be distributed to MovEX, nor will the DEX remain a contributor to DeepBook.
“By July 3, upon Sui Foundation’s request, MovEX had moved the entire allotment of 2.5M tokens to a wallet at a qualified custodian who will release them according to the contractual lockup schedule in compliance with the previously released token emissions schedule,” the foundation noted.
According to the analytics dashboard Token Unlocks, a total of 646.25 million SUI tokens have been unlocked so far, with the next unlocking event expected to take place on July 31.
SUIUSDT valued at $0.6359 | Source: daily SUIUSDT chart from TradingView
MovEX Addresses Community On Situation
On Thursday, July 27, the team behind MovEX released a statement on Twitter, addressing its community on the situation. In the tweet, the project acknowledged that it received the SUI tokens – as claimed by the Sui Foundation.
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MovEX also stated that it transferred its entire allotment of SUI tokens to “custodian and non-custodian wallets”. While confirming that it has moved the tokens back to a qualified custodian, the DeFi protocol claims to understand the decision of the Sui Foundation.
MovEX is a decentralized exchange native to the Sui network. According to the protocol’s whitepaper, it combines an automated market maker (AMM) and order book to create a hybrid liquidity DEX.
Featured image from Dreamstime, chart from TradingView
