TL;DR
- Movement Labs suspended its co-founder, Rushi Manche, while an external investigation looks into his possible involvement in maneuvers with the MOVE token.
- The scandal broke out after a market maker sold 66 million MOVE, leading to blocked funds and a sharp drop in the token’s market value.
- Coinbase confirmed it will delist MOVE from its platform on May 15, while Groom Lake investigates internal ties and control failures in the project’s management.
Movement Labs faces one of its most delicate crises since its creation. The firm decided to suspend its co-founder, Rushi Manche, after he became involved in a series of accusations linked to the management of the MOVE token. This preventive measure was taken while an external investigation progresses, seeking to determine the level of internal responsibility in the operations under scrutiny.
Binance Detected Unusual Movements
The conflict originated in December, when a market maker sold 66 million MOVE and obtained $38 million in USDT. Binance detected unusual movements in March and blocked the funds. The company then notified Movement Labs and the foundation linked to the project. This episode immediately impacted the market, triggering sharp drops in the token’s value.
In the following weeks, information emerged about the firm involved in the massive sale. Initially, it was linked to Web3Port, but new evidence pointed to Rentech, an alleged shell company with no public records. Leaked contracts revealed that this entity controlled over 5% of the total MOVE supply and intended to inflate its price to reach $5 billion before liquidating its position.
Coinbase announced the delisting of MOVE from its platform, effective May 15, after confirming the token no longer met its listing requirements. The token lost 17% of its value in the last 24 hours and has accumulated a 50% drop over the past month.
Movement Foundation Announces Mitigation Measures
To contain the damage, Movement Foundation decided to cut ties with the implicated market maker and announced the buyback of $38 million in USDT from a new reserve. However, the situation generated distrust among investors and increased pressure on the project’s executive structure.
The investigation, led by Groom Lake, seeks to clarify whether Movement Labs’ top executives participated in the maneuvers or were deceived by external agents. The review also examines the relationships between Movement Labs, the foundation, and Rentech, due to the risks involved in handing over a considerable portion of the token supply to an entity without effective oversight.
