On Friday, Movement Labs, the team behind a prominent layer 2 blockchain initiative, announced the suspension of co-founder Rushi Manche.
This action comes in light of an ongoing review by a third party, which is examining the governance of the organization and recent actions by a market maker. The timing of this suspension raises concerns, especially regarding the MOVE token associated with the project.
Amidst the controversies, Coinbase disclosed on Thursday that it will stop trading the MOVE token starting May 15. The exchange has moved the MOVE order books to a limit-only status. While Coinbase hasn’t provided specific reasons for this action, it indicated that this decision was a result of a standard review of its listing criteria.
Movement Labs Admits Errors Following Binance’s Discovery of $38M MOVE Token Scandal
The Movement blockchain, which introduced its mainnet beta and native token last December, has been under increasing scrutiny since March. This criticism intensified after Binance identified and froze the profits of a market maker that allegedly sold off significant amounts of MOVE tokens.
Manche publicly accepted the mistakes in an X post on April 30, stating that the company had placed trust in inappropriate advisors and made missteps while navigating a bear market.
These comments came after Binance’s more extensive investigation, resulting in the removal of the unnamed market maker for misconduct linked to the sale of approximately 66 million MOVE tokens.
The implicated market maker is said to have sold the tokens on December 10, 2024, just a day after the token was launched, without making substantial buy orders.
This activity generated a net profit of $38 million USDT before Binance banned the entity in March. Consequently, Binance notified the Movement Network Foundation and Movement Labs about these irregularities, froze the market maker’s earnings, and permanently prohibited them from trading on its platform.
Movement Labs Undergoes Further Investigation Into Market Maker Misconduct and Internal Legal Conflicts
The Movement Network Foundation asserts it was unaware of the market maker’s actions, claiming it was only informed of the misconduct on March 11, 2025. Originally, the foundation engaged the market maker based on its solid past performance. However, upon recognizing the breach of agreement, they quickly severed ties and informed other major exchanges about the ongoing inquiry.
Moreover, CoinDesk reported recently that Movement Labs is looking into whether it was led to sign a market-making agreement under false pretenses. This agreement purportedly allowed a middleman, Rentech, to manage the 66 million MOVE tokens.
This arrangement allegedly triggered a $38 million sell-off, raising accusations of market manipulation. Internal documents suggest that Rentech operated on both ends of the deal, suggesting a potential conflict of interest, as Rentech was both an agent for the Movement Foundation and a part of Web3Port.
The repercussions of this incident have unveiled internal strife, with Movement’s legal team initially opposing the deal but being overruled. The ongoing investigation is now scrutinizing whether co-founder Rushi Manche or advisors like Sam Thapaliya were more involved than previously understood.
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