The Movement Labs whirlwind intensifies, causing notable losses for MOVE token holders. A new development following the Coinbase delisting announcement has exacerbated the losses.
Issues surrounding market maker actions have soured sentiment for the Movement Labs ecosystem, going back over a month.
Movement Labs Co-founder Rushi Manche Suspended
Following Coinbase’s announcement on plans to delist the MOVE token, Movement Labs has suspended Rushi Manche, its co-founder, paving the way for market maker investigations.
“We confirm that Rushi Manche has been suspended from Movement Labs. This decision was made in light of ongoing events and as the third-party review is still being conducted by Groom Lake regarding organizational governance and recent incidents involving a market maker,” wrote Movement.
The debacle concerns a market maker scandal involving Web3Port, which allegedly recently dumped 66 million MOVE tokens. The incident caused a 20% crash in the MOVE token price.
As it happened, Binance exchange penalized a market maker for the Movement project due to violations of trading regulations, freezing its profits.
Recently, Movement Labs launched a third-party investigation into alleged market maker misconduct involving the MOVE token. Interestingly, they launched this investigation during Manche’s temporary leave of absence. However, Manche had disputed reports of his departure from the project.
“Very much still at Movement. Missed company offsite because I was in Asia for Web3Festival,” Manche said on X.
Manche also responded to speculation about his status on Slack, stating that he remains active and participates in weekly ecosystem calls. His Slack profile, which sources said had been temporarily deactivated, appeared to be reinstated recently.
Therefore, the latest development involving his suspension points to the depth of the matter, likely amid new findings in the third-party investigation.
Questions center on liquidity partner vetting and, inadvertently, the future of the Movement ecosystem. They also raise concerns about Movement Labs’ internal controls.
“How about Sam Thapaliya?” The Block co-founder Mike Dudas chimed in.
Thapaliya, the founder of Zebec Protocol, has known Movement Labs co-founders Rushi Manche and Cooper Scanlon since college. He advised Movement Labs, particularly around the launch of their MOVE token, including assisting with curating the airdrop whitelist.
His role was scrutinized following a controversial market-making agreement with Rentech, which led to a $38 million token sell-off scandal in December 2024. Speculation suggests that Thapaliya was included in key emails regarding the Rentech deal.
There is also speculation that his influence as a “shadow third co-founder” shaped last-minute decisions. However, Thapaliya has denied having any formal role, equity, tokens, or decision-making power in Movement Labs or the Movement Foundation.
Rushi Manche To Provide Clarity
While he is yet to address recent developments involving his suspension, Manche recently committed to providing clarity.
“…lots of rumors circulating and internal drama. I am excited to start clearing stuff up, reveal the story, and clear my name, starting with this article,” he stated.
In the detailed post, Manche claimed “opportunistic administrators” acting as shadow decision-makers within the foundation misled the team.
“These same representatives are the ones who broker deals, run financial treasuries, make hires, and ‘negotiate deals’ behind the scenes while letting others take the blame,” he added.
Urging founders to work with reputable firms that do not run their agendas, Manche articulated that the Movement had deviated far from the original vision.
It remains unknown whether this exposé led to his suspension, as Manche did not immediately respond to BeInCrypto’s request for comment. However, following his remarks, the MOVE airdrop (Movedrop), expected on April 30, was put off.
“Movedrop delayed again, what a clown show. The worst thing was being announced the exact day it was supposed to happen not professional, not respectful. MOVE is a real disappointment,” one user lamented.
As the Movement Network’s credibility and reputation continuously come into question, the MOVE token is down by almost 22% in the last 24 hours. As of this writing, it has exacerbated the post-Coinbase delisting announcement crash to trade for $0.20.
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