Movement Labs confirmed the termination of its co-founder, Rushi Manche, following controversy over a market maker deal that he brokered.
Movement Labs made the announcement in a May 7 X post, stating it had “terminated Rushi Manche.” The project said it “will continue under a different leadership.” The post also alludes to upcoming governance changes.
The termination follows Movement Labs announcing Manche’s suspension earlier this month, explaining that the “decision was made in light of ongoing events.” It also comes after Coinbase’s recent decision to suspend the Movement Network (MOVE) token, citing its failure to meet its listing standards.
Related: Movement Network to buy back tokens with $38M recovered from rogue market maker
Movement Labs launches Move Industries
In addition to terminating Manche, Movement Labs announced the launch of Move Industries, with former Movement Labs employees Torab Torabi as the firm’s CEO and Will Gaines as its chief marketing officer. “In light of recent news, we needed a clean break. Movement started with the community and our builders,“ the announcement stated.
The firm promised better governance with new leadership, town halls for heightened transparency and improved vetting and verification procedures. Other, less tangible changes include “evolved leadership philosophy” and a “return to crypto’s radical roots.”
Market makers at it again
The termination comes after a recently announced third-party review requested by the Movement Network Foundation into an agreement orchestrated by Manche with Rentech. Rentech then helped broker an agreement with market maker Web3Port.
After the deal concluded, Web3Port reportedly sold the 66 million MOVE that it gained through the deal, about 5% of the total supply. This led to $38 million in downward price pressure in December 2024.
The investigation is being conducted by private intelligence firm Groom Lake. The organization’s founder, Fernando Reyes Jr., told Cointelegraph that he “won’t reveal any information about Movement Labs or Movement Foundation without the express written consent.”
Still, he hinted at developments by citing Byzantine Emperor Basil II, “The Bulgar Slayer.” He promised:
“I will soon do what he did to a large swath of scammers in this industry. I will break them.“
Related: How to choose a market maker for your Web3 project
Market makers make or break tokens
A mid-April analysis suggested that the right market maker can be a launchpad for a cryptocurrency project, opening the door to major exchanges and providing valuable liquidity to ensure a token is tradeable. Still, the same sort of organization can destroy a project before it gets started.
In summer 2024, reports suggested that up to 78% of new token listings since April 2024 had been poorly conducted, with some suggesting that market makers were involved.
Creditors of bankrupt cryptocurrency lending platform Celsius Network have claimed that leading crypto market maker Wintermute was involved in the wash trading of the Celsius token. Wash trading is a form of market manipulation, creating an illusion that a particular asset is trading at a higher volume than it is.
Other similar cases include Fracture Labs — creator of the Web3 game Decimated — filing a suit in late 2024 against market maker Jump Crypto for allegedly orchestrating a pump-and-dump scheme using its in-game currency, DIO.
Some reports claimed that DWF Labs — one of Binance’s largest trading clients — engaged in market manipulation and wash trading and inflated trading volumes as much as $300 million through deals with crypto projects. DWF Labs and Binance denied the accusations in May 2024.
US regulators began taking matters into their own hands by creating a fake digital asset and looking for market makers to manipulate it. As a result, a Massachusetts court fined crypto market maker CLS Global for fraudulent manipulation of trading volumes last month.
Magazine: What do crypto market makers actually do? Liquidity, or manipulation