Movement Labs Investigates Market Maker Collusion

The team at Movement Labs is investigating a deal with a market maker that led to the dumping of 66 million MOVE tokens and a subsequent drop in the asset’s price shortly after its listing. This was reported by CoinDesk, citing internal project documents.

Deal Structure

According to employee correspondence, Movement Foundation transferred 66 million MOVE tokens (5% of the issuance) to Rentech, a middleman without a public reputation.

The contract allowed the firm to sell tokens once the project’s market capitalization reached $5 billion. This created an incentive to inflate the price followed by a sell-off, experts at CoinDesk reported.

On December 9, a day after MOVE’s listing on exchanges, wallets linked to Rentech and the market maker Web3Port withdrew $38 million, triggering a 47% price drop.

Binance blocked the market maker’s account for “violations,” and Movement announced a token buyback to stabilize the market.

Internal Conflict

Movement Foundation’s legal counsel, J. K. Peck, initially called the contract with Rentech “the worst agreement in history,” but signed a revised version under pressure. He warned that the deal handed control over MOVE’s liquidity to an “opaque entity.”

The investigation revealed that Rentech acted as an agent for both Movement Foundation and Web3Port, potentially allowing it to dictate terms. Rentech founder Galen Lo-Kun claims the deal’s structure was agreed upon with Peck, though Peck denies involvement.

Role of “Shadow” Advisors

CoinDesk sources point to the possible involvement of Movement Labs co-founder Rushi Manche and project advisor Sam Tapalia in the scheme. It is reported that Rentech founder Galen Lo-Kun is one of Tapalia’s business partners.

Internal chats show Manche promoted the deal with Rentech, ignoring legal objections. Tapalia, who was present at Movement’s office on the token launch day, participated in forming airdrop lists but denies influencing company decisions.

Expert Assessment

According to industry veteran Zak Mianian, Movement’s contracts created ideal conditions for a Pump & Dump scheme. Market makers could artificially inflate the price and then offload tokens onto retail investors, he explained.

Movement Labs has hired the auditing firm Groom Lake to analyze the deals.

Earlier, experts attributed insider manipulation as the cause of the recent 90% crash of the OM token from the RWA project Mantra. The coin lost $5.5 billion in market capitalization.