- TLDR:
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Movement Labs suspended co-founder Rushi Manche following a token dump scandal.
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66 million MOVE tokens were sold by a misrepresented market maker, sparking backlash.
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Binance froze $38M in profits, Coinbase plans to delist MOVE, and an audit is ongoing.
Co-Founder Suspended After Token Dump Scandal
Movement Labs has suspended co-founder Rushi Manche as the company faces internal and public scrutiny over a botched token launch and controversial deal with a market maker. The move follows revelations that 66 million MOVE tokens were dumped within 24 hours of launch, causing a significant price collapse.
The company stated the decision was made as it awaits results from a third-party governance audit being conducted by Groom Lake. The audit is investigating recent incidents involving a deal with Rentech, a shell company posing as a subsidiary of Chinese firm Web3Port.
Rentech Deal Sparks Industry Backlash
Rentech was contracted to provide liquidity support for MOVE’s launch but instead dumped its entire allocation, making $38 million in profit, which Binance has since frozen. Reports suggest that Manche, who was involved in both Movement Labs and its nonprofit Foundation, helped push through the contract despite legal objections.
CoinDesk cited legal counsel calling the agreement “possibly the worst” they had reviewed. The token dump led to accusations of market manipulation, and Movement Labs has claimed it occurred without their consent.
Binance and Coinbase React
Binance publicly offboarded the market maker responsible for the dump and froze the profits, citing misconduct. Coinbase later announced it would suspend MOVE trading on May 15 following a routine asset review.
As a result of the mounting controversies, the MOVE token dropped 14% in a single day and hit an all-time low of $0.20, according to CoinGecko. It’s down over 21% on the day.
Audit and Community Reaction
Movement Labs' Telegram moderators confirmed Manche’s suspension and urged the community to await the results of the audit. The team has not yet provided a clear timeline for the investigation’s conclusion but emphasized a commitment to transparency moving forward.
