tl;dr
Movement Labs, a prominent Ethereum layer-2 startup, suspended co-founder Rushi Manche amid controversy over a token deal that led to 66 million MOVE tokens being sold on the open market, causing backlash. The issue centers on a market-making agreement with Rentech, a shell company misrepresenting i...
Movement Labs, a prominent Ethereum layer-2 startup, has suspended co-founder Rushi Manche amid controversy surrounding a flawed token market-making deal that led to a massive dump of 66 million MOVE tokens on the open market, sparking significant internal and public backlash.
The controversy centers on a market-making agreement with Rentech, a shell company that misrepresented its affiliation with Chinese firm Web3Port. Rentech sold its entire token allocation within 24 hours of the MOVE token launch, causing turmoil for Movement Labs. Internal documents revealed conflicts of interest and problematic contract terms flagged by legal counsel as “possibly the worst agreement” ever reviewed, yet the deal was still approved.
Rushi Manche allegedly forwarded early drafts of the contract and maintained involvement in both Movement Labs and the nonprofit Foundation, despite their intended separation. Binance subsequently offboarded the implicated market maker, believed to be Rentech, freezing $38 million in profits and accusing it of market manipulation through flooding sell orders and minimal buy support, creating an artificially thin market.
Movement Labs responded by denying consent to the token dump, stating it happened “against our wishes” and was in breach of their agreement. Meanwhile, Coinbase announced it will suspend MOVE trading on May 15 following a routine asset review, contributing to MOVE’s price plunging 14% to $0.20, its lowest ever, and a 21% drop on the day according to Coingecko data.
The company has commissioned a third-party governance audit conducted by Groom Lake to investigate the incident and Manche’s role in pushing the deal. The community remains vigilant, with Movement Labs urging patience as the investigation unfolds and the project’s moderators promising clearer understanding once the audit results are released.