Movement Labs has suspended co-founder Rushi Manche following revelations tied to a market-making scheme involving the MOVE token and an opaque firm linked to suspicious token dumping.
Background
- Movement Labs announced late Thursday it has suspended co-founder Rushi Manche after a market-making controversy escalated.
- The move follows Coinbase's decision to suspend MOVE token trading starting May 15, citing concerns arising from the same scandal.
- The project’s troubles began after the beta launch of its Movement Network mainnet and the distribution of its MOVE token in December.
- A market maker, allegedly tied to Movement, dumped 66 million MOVE tokens and reportedly profited 38 million USDT, according to Binance’s internal findings shared in March.
- Binance subsequently froze the proceeds and alerted both Movement Labs and the Movement Network Foundation of irregularities in the token’s market behavior.
Why Should You Pay Attention?
- The case raises broader questions about governance and transparency in early-stage crypto projects.
- The alleged misconduct may have involved misrepresentations in partnerships and deliberate price inflation strategies for profit extraction.
- Coinbase’s decision to delist MOVE highlights the growing regulatory and reputational risk surrounding questionable market-making activities in the Web3 space.
Who Said What?
- Movement Labs said in a statement on X:
“This decision was made in light of ongoing events and as the third-party review is still being conducted by Groom Lake regarding organizational governance and recent incidents involving a market maker.”
- In an earlier post, the team clarified:
“Movement Labs and Movement Network Foundation have commissioned an exhaustive third-party review of market maker abnormalities… Once we have every detail, we will share findings.”
- CoinDesk reported that Rentech, the market-making firm involved, was misrepresented as a Web3Port subsidiary, but lacked any digital footprint. Documents indicate Rentech controlled approximately 5% of MOVE’s supply and had incentives tied to pumping the token’s valuation to $5 billion.
Zooming Out
- Movement Labs’ situation is part of a wider industry reckoning on the ethics of token distribution and the role of insider entities in manipulating early markets.
- The scandal comes at a time when regulators and major exchanges are intensifying scrutiny over token listing practices, governance structures, and market manipulation.
- With the Groom Lake investigation ongoing, Movement Labs faces the challenge of rebuilding user trust and potentially restructuring internal controls.
