Movement Labs has made headlines today by announcing the termination of its co-founder, Rushi Manche, amid a swirling controversy involving a market maker deal. This development, revealed in a May 7 post, marks a significant shift for the project, which plans to move forward under new leadership and with an evolving governance structure.
A New Chapter for Movement Labs
The decision to sever ties with Manche follows an earlier suspension and coincides with Coinbase’s suspension of the Movement Network (MOVE) token, which the exchange claims failed to meet its listing standards. In a bold move, Movement Labs has also unveiled a new venture, Move Industries, with former employees Torab Torabi and Will Gaines taking the helm as CEO and chief marketing officer, respectively.
“In light of recent news, we needed a clean break,” the company stated, emphasizing its commitment to the community and grassroots builders. This shift is not only a change in leadership but also an opportunity for Movement Labs to address governance issues and enhance transparency through town halls and improved vetting procedures.
The Market Maker Conundrum
At the heart of this upheaval is a controversial agreement brokered by Manche with Rentech, which subsequently involved market maker Web3Port. Web3Port’s sale of 66 million MOVE tokens—about 5% of the total supply—resulted in $38 million in downward price pressure last December. The repercussions of this deal have prompted a third-party review by private intelligence firm Groom Lake. Fernando Reyes Jr., the firm’s founder, remains tight-lipped about the investigation but hints at significant developments on the horizon. For more details on the token-dumping scandal, see The Protocol: Inside Movement’s Token-Dump Scandal.
Market makers like Web3Port play a critical role in the cryptocurrency ecosystem, often acting as kingmakers by providing liquidity and facilitating token listings on major exchanges. However, as recent history shows, they can also spell disaster if deals go awry. In summer 2024, reports indicated that poorly executed token listings, allegedly involving market makers, affected up to 78% of new tokens since April of that year.
A Cautionary Tale
The Movement Labs saga is not an isolated incident. Consider the case of Celsius Network, where creditors accused leading crypto market maker Wintermute of engaging in wash trading—a form of market manipulation. Similarly, Fracture Labs, the creator of the Web3 game Decimated, filed a lawsuit against Jump Crypto, alleging a pump-and-dump scheme with its in-game currency, DIO.
Market manipulation concerns are not limited to independent projects. Even major players like DWF Labs, one of Binance’s largest trading clients, have faced accusations of artificially inflating trading volumes, though both DWF Labs and Binance have denied such claims.
Regulatory bodies are taking notice. A Massachusetts court recently fined CLS Global for fraudulent market manipulation, and US regulators continue to explore ways to curb these practices through innovative approaches, such as creating fake digital assets to test market maker behavior.
What Lies Ahead
As Movement Labs embarks on this new journey, questions linger about the implications for the broader crypto market and the role of market makers in shaping the future of digital assets. The industry is at a crossroads, grappling with the fine line between liquidity provision and market manipulation. The outcomes of ongoing investigations and regulatory actions could set precedents that redefine the landscape. This follows earlier coverage of Movement Labs suspending Rushi Manche amid Coinbase delisting.
The coming months will be pivotal for Movement Labs as it seeks to rebuild trust and reestablish its footing in the volatile world of cryptocurrencies. The path forward is fraught with challenges, but also ripe with opportunities for those willing to learn from past missteps and embrace the radical roots of crypto innovation.
In this dynamic environment, one thing remains certain: the stakes are high, and the eyes of the crypto community are watching closely. As developments unfold, the industry will need to strike a delicate balance between innovation and integrity to ensure a sustainable and trustworthy future.
Source
This article is based on: Movement Labs terminates co-founder Rushi Manche, launches new firm
Further Reading
Deepen your understanding with these related articles:
- CoinDesk Recap: Movement’s Very Bad Week
- Crypto token failures soar, with 1 in 4 launched since 2021 dying in Q1: CoinGecko
- ‘Huge Shift’ in crypto firms’ compliance mindset, says Elliptic co-founder
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.
