Movement Labs suspends co-founder Rushi Manche following market-making scandal

Movement Labs confirmed that its co-founder, Rushi Manche, has been suspended from the organization following a market-making scandal.

"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," Movement Labs said in an X post late Thursday.

The controversy has led to the planned suspension of trading for the MOVE token on Coinbase. Manche's suspension came just a few hours after crypto exchange Coinbase announced that it would suspend trading of MOVE starting May 15.

Following the December launch of Movement Network's mainnet beta and native token, a market maker allegedly sold off 66 million MOVE tokens, ultimately netting 38 million USDT in profit, according to Binance's findings in March. Binance said at the time that it had notified Movement Labs and Movement Foundation of the irregularities involving their market maker and had frozen the proceeds.

Movement Labs allegedly signed a market-making agreement with Rentech, which was misrepresented as a subsidiary of Web3Port but appears to be a separate entity with no digital presence, CoinDesk first reported. Contracts revealed that Rentech controlled around 5% of MOVE’s supply, with incentives to inflate the token’s price to a $5 billion valuation before dumping it for shared profits, raising concerns about self-dealing.

The organization has now initiated a third-party investigation into the incident.

"Movement Labs and Movement Network Foundation have commissioned an exhaustive third-party review of market maker abnormalities," Movement Labs said on Wednesday. "The review by Groom Lake is ongoing. Once we have every detail, we will share findings."

MOVE's token price fell 19.9% over the past 24 hours to trade at $0.2 at the time of writing, according to The Block's MOVE price page. It has a market capitalization of $501.4 million.