Movement Labs Suspends Co-Founder as Token Dump Sparks Internal Crisis

Movement Labs has suspended co-founder Rushi Manche as investigations deepen into a controversial token dump and governance failures. The decision follows the collapse of the MOVE token’s price and heightened scrutiny of Movement’s internal operations.

MOVE Token Faces Backlash

The MOVE token fell over 20% after Binance banned Web3Port, a market maker linked to a large-scale token selloff. Coinbase soon suspended MOVE trading, citing concerns over market manipulation.

The selloff began shortly after MOVE’s exchange debut in December. More than 66 million tokens—over 5% of total supply—were dumped into the market. This triggered a $38 million liquidation, catching investors off guard.

The Rentech Controversy

At the heart of the scandal is a murky contract involving Rentech, an entity with no online presence. Internal documents show Rentech appeared on both sides of the agreement: once as a Web3Port subsidiary, and once as an agent for Movement Foundation.

This dual role raised alarms. Movement’s legal counsel, YK Pek, initially called it “possibly the worst agreement” he had ever reviewed. Director Marc Piano also refused to sign the original draft.

Despite initial objections, a revised contract was eventually approved. The deal allowed Web3Port to borrow and potentially liquidate a significant portion of MOVE tokens—raising red flags about possible self-dealing.

Internal Conflict Surfaces

The situation has exposed deep fractures within Movement’s leadership. Executives, advisors, and legal teams are under scrutiny for greenlighting the Rentech arrangement. Investigations are ongoing into who ultimately authorized the deal.

Manche, who was suspended last week, is said to have circulated the original Rentech contract and pushed for its approval. Telegram messages reviewed by reporters show him forwarding the contract for signature in late March.

Some employees believe Sam Thapaliya, a close advisor to Manche, may have influenced the deal behind the scenes. Thapaliya denies holding any formal power or ownership in Movement Labs but was copied in key communications with Web3Port and Rentech.

Multiple Versions of the Same Deal

Documents reveal Rentech had already signed a nearly identical contract with Web3Port before the Movement Foundation approved its version. That earlier deal also included profit-sharing clauses if MOVE reached a fully diluted valuation of $5 billion—creating incentives to inflate the price before dumping.