Movement Crypto Startup Hit by $38M Insider-Dealing Scandal

Movement, a prominent crypto startup backed by World Liberty Financial, was rumored to be closing a $100 million series B funding round. However, a CoinDesk investigation revealed that the network is now embroiled in an insider-dealing scandal that has exposed a murky side of crypto deal-making. Movement Labs is currently investigating whether it was misled into signing a market-making agreement that granted an obscure middleman control over 66 million MOVE tokens, resulting in a $38 million selloff after the token’s debut.

Internal contracts show that Rentech, a firm with no digital footprint, appeared on both sides of the deal. In one instance, Rentech acted as a Web3Port subsidiary, and in another, as an agent of the Movement Foundation. This dual role has raised questions about self-dealing and potential conflicts of interest. Foundation officials initially flagged the Rentech deal as “possibly the worst agreement” they had ever seen. Experts warned that the arrangement created incentives to artificially inflate MOVE’s price before dumping tokens onto retail investors.

The scandal has exposed a rift within Movement’s top leadership. Executives, legal counsel, and advisors are all under scrutiny for their roles in facilitating the arrangement despite internal objections. The incident has highlighted the need for greater transparency and accountability in the crypto industry, as well as the potential risks associated with insider dealing and hidden middlemen.

This scandal serves as a cautionary tale for the crypto industry, underscoring the importance of due diligence and ethical practices in deal-making. It also raises questions about the role of shadow advisors and hidden middlemen in the industry, and the potential for conflicts of interest to undermine trust and integrity. As the investigation into Movement’s token-dump scandal continues, it remains to be seen how the industry will respond to these challenges and work to build a more transparent and accountable future.