Movement Labs, the company behind the MOVE cryptocurrency, is currently embroiled in a scandal involving allegations of a deceptive financial agreement that led to market manipulation and a significant price drop for its token. The company, backed by World Liberty Financial, is investigating whether it was misled into signing an agreement that granted excessive control over the MOVE token market to a single entity.
Key Points of the Scandal:
Token Dump: On December 9, immediately following the MOVE token’s exchange debut, 66 million tokens were sold into the market, causing a steep price decline and sparking accusations of insider trading.
Middleman Involvement: Cooper Scanlon, co-founder of Movement Labs, revealed that over 5% of MOVE tokens designated for Web3Port, a market maker, were funneled through Rentech, an entity the foundation believed to be a Web3Port subsidiary but apparently was not. Rentech denies any misrepresentation.
Contractual Concerns: A contract between Movement and Rentech reportedly loaned about half of the MOVE token’s public supply to a single counterparty, giving them unusual control over the token. Crypto founder Zaki Manian, after reviewing the contracts, warned of incentives to manipulate the price and then “dump on retail for shared profit.”
Rentech’s Dual Role: Rentech appeared in agreements on both sides of the deal with the Movement Foundation, acting as both an agent of the Foundation and a subsidiary of Web3Port, a setup that potentially allowed them to dictate terms and profit from their position.
$38 Million Liquidation: Wallets connected to Web3Port liquidated $38 million in MOVE tokens immediately after the token’s launch. Binance later banned the market-making account for “misconduct,” and Movement announced a token buyback plan.
Internal Disputes: The situation has reportedly caused rifts within Movement’s leadership, with executives, legal counsel, and advisors under scrutiny for their roles in facilitating the arrangement despite internal objections.
Investigation and Blame: Movement is investigating the involvement of co-founder Rushi Manche, who initially proposed the deal with Rentech, and Sam Thapaliya, an advisor to Movement and business partner to Law-Kun.
“Worst Agreement Ever Seen”: Foundation officials initially described the Rentech deal as “possibly the worst agreement” they had ever seen, with experts cautioning that it created incentives to inflate MOVE’s price before dumping tokens on retail investors.
The Aftermath:
Following the token dump, Binance banned the market-making account, and the Movement Foundation announced a token buyback program worth $38 million in an attempt to restore liquidity and investor confidence. The Foundation has also engaged a professional intelligence agency to conduct a third-party review of the market maker’s misconduct. The results of this review, along with the actions taken, will be released to the public.
