Movement Labs has suspended co-founder Rushi Manche following an investigation into a deal with market maker Web3Port that put pressure on the $38 million MOVE token exchange rate in December.
Coinbase had previously suspended trading in the token, citing its failure to meet listing standards. An external investigation is underway.
Price Pressure and Start of the Investigation
On May 2, Movement Labs announced the temporary suspension of co-founder Rushi Manche, citing “recent developments.” The decision followed the launch of an independent investigation into a deal between Movement and market maker Web3Port, arranged by Manche through intermediary Rentech.
The inquiry is being conducted by private analytics firm Groom Lake. The focus is the transfer of 66 million MOVE tokens to Web3Port, representing approximately 5% of the total token supply. In December 2024, the market maker sold these tokens, causing significant price pressure and a decline in value.
Following this, Coinbase suspended trading of the MOVE token, stating that the asset no longer met its listing standards. While the precise reasons for delisting were not disclosed, it is known that the exchange conducted its own reassessment of the project. The trading halt marked the first public consequence of the controversy before Movement decided to suspend the co-founder.
Analysts emphasize that market makers have long played a critical role in the success of new tokens. Their involvement can ensure liquidity, accelerate listings on exchanges, and build trader confidence. However, when incentives are misaligned or terms are opaque, a market maker can destroy a project early on by applying downward pressure on price or manipulating trading volumes.
Scandals Involving Other Market Makers
In 2024, Celsius creditors accused Wintermute of “wash trading” the Celsius token — generating fake volumes to simulate market activity. Game studio Fracture Labs filed a lawsuit against Jump Crypto, alleging that it orchestrated a “pump-and-dump” scheme with the gaming token DIO.
The Wall Street Journal reported that one of Binance’s largest clients, DWF Labs, manipulated trading volumes and colluded with projects involving a total of $300 million. Both parties denied the allegations.
In March 2025, a Massachusetts court fined CLS Global for trading volume manipulation. In February, the founder of Got Bit was extradited from Portugal to the U.S., charged with conspiracy to commit fraud and market manipulation.
Doubts Over New Listings
According to a summer 2024 report, up to 78% of new token listings since April were conducted with violations. In several cases, market makers were granted opaque terms, which led to token price drops shortly after launch.
The situation with Movement Labs adds another example to the growing list of market making-related controversies in the crypto industry.
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