Movement Labs, a once-promising crypto startup backed by Donald Trump’s World Liberty Financial, is facing a whirlwind of controversy after internal documents revealed the company secretly promised significant stakes of its token, MOVE, to early advisors. These undisclosed deals, uncovered by CoinDesk, have cast a shadow over the company’s internal dynamics and raised critical questions about who truly wields power behind the scenes.
Behind Closed Doors: The Secret Deals
The explosive revelations point to Movement Labs’ early reliance on key insiders to secure a foothold in the crypto industry. According to documents reviewed by CoinDesk, the company committed large portions of MOVE’s supply to a select few advisors before its token launch. These arrangements were never disclosed to investors, fueling speculation and distrust.
Among the beneficiaries were Sam Thapaliya, CEO of Zebec Protocol, and Vinit Parekh, a blockchain consultant. Thapaliya was reportedly promised up to 7.5% of MOVE’s total supply, a stake worth over $50 million at current prices. Meanwhile, Parekh’s entities were not only allocated tokens but also promised substantial financial rewards tied to Movement Labs’ fundraising success.
Power Struggles and Internal Unrest
The fallout from these revelations has not only tarnished Movement’s image but also exposed a growing rift between its co-founders, Rushi Manche and Cooper Scanlon. Manche, who was recently ousted from Movement Labs, has pointed fingers at Scanlon, suggesting his former partner played a pivotal role in approving these controversial agreements. This development is further explored in Movement Labs Suspends Rushi Manche Amid Coinbase Delisting, Token-Dumping Scandal.
“When we started Movement, I was the CTO — leading the engineering team. I left most business decisions, including the contracts, to Cooper,” Manche told CoinDesk. This admission highlights the tensions simmering within the company, tensions that have now spilled into the public arena.
Current and former employees, speaking under anonymity, described a chaotic environment where decisions were made without transparency. Thapaliya, often referred to as a “shadow co-founder,” was a frequent consultant for major decisions, even influencing Movement’s controversial deal with the Chinese market maker, Web3Port, which resulted in a massive sell-off and subsequent token price plunge. For a detailed account of these events, see The Protocol: Inside Movement’s Token-Dump Scandal.
The Larger Crypto Context
This saga is not isolated. It speaks to a broader trend in the crypto industry, where informal agreements — often undisclosed — can significantly impact token ecosystems. Similar cases have emerged, like Eclipse’s covert token allocations to Polychain employees, underscoring the opacity that can pervade this burgeoning sector.
Parekh, for his part, downplayed any financial gain from these agreements. “I just care about the ecosystem,” he told CoinDesk, asserting that no money changed hands. Yet, his involvement in strategic decisions at Movement Labs raises questions about the real motivations behind these secretive deals.
The Road Ahead: Uncertain and Unsettling
As Movement Labs grapples with the repercussions of these revelations, the crypto community is left pondering the implications. Coinbase, a major U.S. exchange, has already suspended trading of the MOVE token, a move that sent shockwaves through the market and halved the token’s value.
Looking forward, Movement Labs announced plans to spin off a new entity, Move Industries, to manage network development. While Scanlon remains involved, he has stepped down as CEO, signaling potential shifts in leadership and strategy.
The controversy surrounding Movement Labs serves as a cautionary tale — a reminder of the critical need for transparency and accountability in an industry still finding its footing. As the dust settles, stakeholders are left with lingering questions about the ethical boundaries of insider deals and their far-reaching effects on both companies and the communities they serve.
Source
This article is based on: Movement Labs Secretly Promised Advisers Millions in Tokens, Leaked Documents Show
Further Reading
Deepen your understanding with these related articles:
- CoinDesk Recap: Movement’s Very Bad Week
- World Liberty’s Stablecoin Will Be Used to Close MGX’s $2B Binance Investment: Eric Trump
- Trump’s Crypto Sherpa Bo Hines Says Crypto Legislation on Target for Quick Completion
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
