Movement Labs Co-Founder Suspended After $38M Token Sell-Off
1min read Movement Labs co-founder Rushi Manche has been officially suspended following a series of events involving a market maker. The suspension comes in the wake of allegations of misconduct surrounding the MOVE token on the Binance exchange. The market maker in question, Web3Port, was accused of selling 66 million MOVE tokens worth $38 million on the day of the token’s Binance listing, December 9, 2024. This action was reportedly against the wishes of Movement Labs and in breach of their agreement.
Movement Labs quickly condemned the market maker's actions and announced a $38 million MOVE buyback program to restore liquidity to the Movement ecosystem. However, the controversy deepened when coinbase exchange also decided to suspend trading on the MOVE token. The token's value plummeted to $0.19, marking a 21% drop in the last 24 hours.
An exposé by CoinDesk revealed that Web3Port had initially proposed a contract with Movement Foundation that included a clause allowing the market maker to liquidate its MOVE positions if the token reached a $5 billion fully diluted valuation (FDV). The contract also stipulated a 50-50 profit-sharing arrangement. Movement Labs initially resisted these terms but eventually agreed to a revised contract that retained the market maker's ability to sell tokens for profit. The revised agreement used a "variable interest" mechanism, where tokens would be loaned to Web3Port only if the token price exceeded a certain threshold.
The controversy surrounding the contract was further complicated by the involvement of Rentech, a middleman entity that appears to be a subsidiary of Web3Port. Movement Foundation's general counsel, YK Pek, stated that the foundation was misled into entering the agreement under false pretenses, rather than the terms themselves being the issue. This misalignment of incentives and the subsequent actions of the market maker have led to significant repercussions for Movement Labs and its MOVE token.
Ask Aime: What is the cause of the MOVE token's price crash, and should retail investors sell their holdings?
