The Struggling Rise of Movement Labs: A Layered Saga of Suspensions and Scandals
A Peek into the Drama
Market Maker in Hot Water: Co-Founder of Movement Labs Faces Suspension Amidst Scandals
Movement Labs, a highly anticipated Ethereum layer-2 startup, is currently in the eye of a storm. The company's co-founder, Rushi Manche, has been temporarily pulled out of the game as the company battles the ripples of a questionable token deal.
Things reached a boiling point on the ith of X, when the company announced the suspension of Manche, stating that the decision was made following ongoing events and the ongoing third-party review by Groom Lake regarding organizational governance and recent incidents involving a market maker.
The Controversial Token Sale
The controversy stems from a market-making deal with Rentech, a company that supposedly presented itself as a subsidiary of Web3Port but allegedly misrepresented its role. Rentech reportedly dumped its entire token allocation within 24 hours of MOVE's launch, causing an uproar.
Internal documents, as reported by CoinDesk, revealed that Rentech appeared on both sides of the agreement, acting as Web3Port's representative in one instance and as an agent on behalf of the Foundation in another. Manche is said to have forwarded early drafts of the contract and continued his involvement in both Movement Labs and the nonprofit Foundation despite their intended separation.
The Rentech Connection
Although not explicitly accused of direct misconduct, Manche's involvement in the circulation of the Rentech deal has come under scrutiny. The leaked contracts granted Rentech control over 5% of MOVE’s supply, with terms incentivizing price manipulation to reach a $5 billion valuation before sell-offs.
consequences and Aftermath
Binance had previously offboarded the market maker responsible for the MOVE dump, citing misconduct, and froze the $38 million it had profited from the dump. The exchange accused the firm, widely believed to be Rentech, of flooding its platform with sell orders while placing minimal buy support, creating an artificially thin market.
Following Binance's allegations, Movement responded, stating that the dump happened "against our wishes, without our consent, and was in breach of our agreement." The crypto exchange Coinbase announced it will suspend MOVE trading on May 15, citing a routine asset review. The token plunged 14% to $0.20, its lowest ever, and is down 21% on the day.
Inside the project's Telegram group, moderator Merq confirmed Manche's suspension and urged the community to await the outcome of the audit. The Foundation has commissioned a third-party investigation, with no timeline for its conclusion disclosed.
Edited by Sebastien Sinclair
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- The co-founder of Movement Labs, Rushi Manche, was temporarily suspended due to a questionable token deal, causing a storm around the Ethereum layer-2 startup.
- The controversy began after a market-making deal with Rentech, a company that supposedly misrepresented its role, leading to allegations of dumping tokens and causing an uproar.
- Internal documents revealed that Rentech appeared on both sides of the agreement, actings as Web3Port's representative in one instance and as an agent on behalf of the Foundation in another, with Manche's involvement under scrutiny.
- The leaked contracts granted Rentech control over 5% of MOVE’s supply, with terms incentivizing price manipulation to reach a $5 billion valuation before sell-offs.
- Binance had previously offboarded the market maker responsible for the MOVE dump, frozen $38 million in profits, and accused the firm (widely believed to be Rentech) of flooding its platform with sell orders while placing minimal buy support, creating an artificially thin market.
- Following Binance's allegations, Coinbase announced it would suspend MOVE trading on May 15, citing a routine asset review, causing the token to plunge 14%.
- As the third-party investigation commissioned by the Foundation continues, the collective business, technology, and finance community awaits the outcome, with all eyes on Movement Labs and their controversies within the world of cryptocurrency and blockchain.
