Movement Labs Suspends Co-Founder Amid 14% MOVE Token Drop
1min read Movement Labs, a blockchain infrastructure startup, has suspended its co-founder, Rushi Manche, amidst a controversy surrounding the MOVE token. The turmoil began with an investigation into suspicious trading activities linked to a market maker associated with Web3Port. Reports indicate that approximately 66 million MOVE tokens were sold shortly after the token’s December 2024 launch, generating profits exceeding $38 million. This massive sell-off triggered a significant drop in MOVE’s price, alarming investors and sparking allegations of market manipulation and insider trading. The token, which initially garnered strong momentum and a strategic vision around scalable Layer 2 rollups, quickly found itself at the center of a reputational storm.
Sources close to the situation suggest that the market maker in question had privileged access to the tokens during the early distribution phase. This revelation raised serious questions about Movement Labs’ governance and the transparency of its tokenomics. In response, the company swiftly suspended Manche pending the outcome of a broader review. The controversy escalated further when one of the largest cryptocurrency exchanges announced that it would suspend trading of the MOVE token. The platform cited concerns about the asset’s compliance with listing standards, particularly surrounding its volatility and the integrity of its market. The delisting not only impacted the token’s visibility and liquidity but also cast doubt on Movement Labs’ ability to uphold the trust of centralized and decentralized partners alike. MOVE’s price dropped an additional 14% in the aftermath, deepening the crisis for the firm.
To address the growing concerns, Movement Labs has initiated a third-party governance audit led by Groom lake, an independent digital asset risk and compliance firm. The scope of the review includes token distribution processes, market-making arrangements, internal communications, and decision-making protocols. The incident underscores the broader challenges facing crypto startups that seek rapid scaling while managing complex token ecosystems. As more institutional players enter the space, demands for transparency, fair access, and strong governance are increasing. Rushi Manche, once celebrated as a rising star in the Web3 world for helping raise $38 million at the age of 21, now finds himself sidelined. His future role in the company remains uncertain as the investigation proceeds. For now, the industry watches closely. The outcome of Movement Labs’ internal review and its handling of this crisis could serve as a key litmus test for emerging protocols navigating similar pressures in the current regulatory and market environment.
