Movement Labs Suspends Co-Founder After Suspicious MOVE Token Activity

Movement Labs, the team behind the high-profile layer 2 blockchain project, announced on Friday that it has suspended co-founder Rushi Manche.

The decision follows an ongoing third-party review focusing on organizational governance and recent incidents related to a market maker’s actions. This suspension comes at a time when the project is under increasing scrutiny, particularly around its MOVE token.

In the midst of the controversy, Coinbase revealed on Thursday that it would be halting trading of the MOVE token on May 15. The exchange has already shifted the MOVE order books to limit-only mode. Although Coinbase did not explicitly cite the reason for the suspension, it stated that the decision followed a routine review of listing standards.

We confirm that Rushi Manche has been suspended from Movement Labs. 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 (@movementlabsxyz) May 2, 2025

Movement Labs Acknowledges Mistakes After Binance Uncovers $38M MOVE Token Scandal

The Movement blockchain, which launched its mainnet beta and native token last December, has faced growing criticism since March, when Binance identified and froze the profits of a market maker allegedly liquidating large quantities of MOVE tokens.

Manche publicly acknowledged the mistakes in an X post on April 30, admitting that the company had trusted the wrong advisors and made errors while entering a bear market.

These admissions followed a deeper investigation by Binance, which removed the unnamed market maker after discovering misconduct involving the sale of about 66m MOVE tokens.

been a brutal few weeks.

lots of rumors circulating and internal drama. im excited to start clearing stuff up, reveal the story, and clear my name, starting with this article.

honestly, mistakes were made. we trusted wrong advisors, mms, and folks going into a bear market. i…

— rushi (@rushimanche) April 30, 2025

The market maker in question allegedly sold the tokens on Dec. 10, 2024, just one day after the token’s listing, without placing significant buy orders.

This resulted in a net profit of $38m USDT before Binance removed the entity in March. In response, Binance informed the Movement Network Foundation and Movement Labs about the irregularities, froze the proceeds from the market maker, and permanently banned the entity from further trading on the platform.

Movement Labs Faces Deeper Investigation Into Market Maker Misconduct and Internal Legal Disputes

The Movement Network Foundation maintains that it was unaware of the market maker’s actions. It alleges it was only informed of the misconduct on March 11, 2025. Initially, the foundation had engaged the market maker based on its previous track record. However, upon discovering the breach of agreement, the foundation severed ties immediately. Additionally, it alerted other major exchanges to the ongoing investigation.

In addition, CoinDesk reported this week that Movement Labs is investigating whether it was misled into signing a market-making agreement. This agreement allowed a middleman, Rentech, to control the 66m MOVE tokens.

The agreement allegedly led to a $38m selloff, sparking accusations of market manipulation. Internal documents suggest that Rentech acted on both sides of the deal. This raises conflict-of-interest concerns, as Rentech was both an agent of the Movement Foundation and a subsidiary of Web3Port.

The fallout from this incident exposed internal divisions, with Movement’s legal counsel initially opposing the deal but being overruled. The investigation is now focused on whether co-founder Rushi Manche or advisors like Sam Thapaliya had a deeper involvement than initially disclosed.