The Sui Foundation recently cut ties with the decentralized exchange, MovEX, citing a breach of contract. The foundation accused MovEX of releasing a substantial number of SUI tokens, which were supposed to be locked up according to their contractual agreement, into circulation.
In a blog post dated July 26, 2023, the Sui Foundation disclosed details about the token supply of their network and the planned token release schedule. Additionally, they announced the termination of their partnership with MovEX due to the breach of the token lockup contract.
The issue arose when early contributors to the Sui network were given SUI tokens subject to a lockup period, with release only permitted according to a predetermined schedule. MovEX was one of the recipients of this token allocation, having received 2.5 million SUI tokens for its contribution to the DeepBook exchange product.
However, the decentralized exchange was found to have violated the token lockup agreement by transferring its entire token allocation in three transactions (625,000 SUI each) to three separate wallets.
These transactions raised concerns about the integrity of the Sui Foundation, with some individuals suggesting that the foundation “intentionally misrepresented” the token release schedule. However, the foundation refuted these claims, clarifying in their latest blog post that they did not authorize the three transactions by MovEX.
Consequently, the Sui Foundation decided to sever its relationship with the decentralized exchange. They also confirmed that no additional SUI tokens would be distributed to MovEX, and the exchange would no longer be a contributor to DeepBook.
The foundation revealed that, at their request, MovEX had transferred the entire token allocation of 2.5 million SUI tokens to a qualified custodian by July 3, who would release them following the contractual lockup schedule as per the previously published token emissions schedule.
As per the analytics dashboard Token Unlocks, approximately 646.25 million SUI tokens have been unlocked thus far, with the next unlocking event anticipated to occur on July 31.
In response to the situation, the team behind MovEX issued a statement on Twitter on July 27, acknowledging that they had indeed received the SUI tokens as stated by the Sui Foundation.
MovEX also clarified that it had initially moved its entire allocation of SUI tokens to “custodian and non-custodian wallets.” However, they confirmed that the tokens were subsequently moved back to a qualified custodian, and they understand the decision made by the Sui Foundation.
MovEX is a decentralized exchange native to the Sui network and operates by combining an automated market maker (AMM) and an order book to create a hybrid liquidity DEX.
