MOVE Falls 50% in a Month Plagued by Controversy and Scandal

The team behind Ethereum Layer 2 (L2) Movement (MOVE) confirmed the suspension of its cofounder, Rushi Manche, on May 2, amidst a third-party investigation surrounding governance and a market making scandal.

The news comes less than one month after it was reported that Manche took a temporary leave from the company, which sparked a sharp selloff in the MOVE token. Rushi was quick to dismiss the reports on X.

MOVE is down over 50% over the last 30 days, and almost 25% over the last week, despite the rest of the market’s strong performance.

MOVE is now 85% off its all-time high of $1.2, and 70% off of Trump-associated World Liberty Financial’s $0.64 buy price.

Manche’s suspension centers around a market making deal involving the Movement Foundation and Rentech, which the Movement Foundation allegedly believed was a subsidiary of investment platform Web3Port. The Movement Foundation found out that the market maker was in fact not affiliated with Web3Port, and part of the ongoing investigation is to determine how the agreement passed.

According to reporting from CoinDesk Deputy Managing Editor Sam Kessler on April 30, the eventual agreement with Web3Port contained a clause where if the market maker’s tokens were sold below a $5 billion valuation, 100% of the profit would be allocated to Movement. However, “If (and only if) MOVE hit a $5B valuation, W3P was allowed to split sale profits 50/50 with Rentech.”

This design incentivizes the market maker to allow or even promote price appreciation of the token above the $5 billion mark, and to also take the profit when it exists (above the $0.5 token price) and sell when possible.

The nature of the deal and direct beneficiaries remain unclear, and is all being investigated by audit and investigatory firm Groom Lake. However, it has been disclosed that the now-suspended Manche did circulate the deal involving Rentech internally.

Movement Labs alleges that it was the victim in the deal, but centralized exchanges are not taking the risk, and MOVE was delisted by Coinbase on May 1.

Moving forward, the team has delayed its onboarding and incentives campaign MoveDrop and says it will update the public with the findings of Groom Lake’s investigation once concluded.