The Movement Network launched in December 2024 as one of crypto's most anticipated projects. Within months, it became one of the industry's most cautionary tales. A market-making deal gone wrong, a co-founder terminated, exchange delistings, and a 97% price collapse from all-time highs transformed a $3 billion valuation prospect into a case study in governance failure.

Understanding what happened matters for any trader considering MOVE positions. The technical fundamentals remain sound, but the trust deficit created by this scandal will take years to repair.

The Deal That Started It All

In the weeks before MOVE's December 9, 2024 exchange debut, Movement Foundation signed a market-making agreement that would later be called "possibly the worst agreement" by its own general counsel. The deal involved three parties: Movement Foundation, a Chinese market maker called Web3Port, and an obscure intermediary named Rentech.

According to CoinDesk's investigation, Rentech appeared on both sides of the contract. It simultaneously claimed to be a Web3Port subsidiary and acted as an agent for Movement Foundation. This dual role created what experts called a textbook self-dealing arrangement.

The contract granted Rentech control over 66 million MOVE tokens, representing approximately 5% of total supply. More critically, the agreement included a clause allowing liquidation once MOVE's fully diluted valuation hit $5 billion, with profits split 50-50 between Rentech and Movement Foundation.

The December Dump

One day after MOVE listed on Binance, wallets tied to Web3Port began selling. All 66 million tokens were liquidated within hours, extracting approximately $38 million in USDT while MOVE's price cratered.

The timing couldn't have been worse for retail investors. Many had just bought into what they believed was a legitimate Layer 2 project with strong fundamentals. Instead, they watched their positions collapse as insiders cashed out.

Timeline of Events:

Who Knew What

The scandal exposed deep rifts within Movement's leadership. Internal Slack messages showed co-founder Cooper Scanlon telling employees that the foundation was "led to believe" Rentech was a Web3Port subsidiary. The investigation focused on who pushed the deal through despite clear internal objections.

Co-founder Rushi Manche initially forwarded the Rentech deal to the team and promoted it internally, according to sources cited in The Block's reporting. YK Pek, the foundation's general counsel, had explicitly flagged the original proposal as "the worst deal I have ever seen." A revised version was signed anyway.

Sam Thapaliya, an informal adviser to Movement and business partner to Rentech's Galen Law-Kun, also came under scrutiny. The web of relationships between advisers, middlemen, and foundation officials suggested either remarkable incompetence or something more deliberate.

Manche publicly acknowledged mistakes in an April 30 post: "Honestly, mistakes were made. We trusted wrong advisors, MMs, and folks going into a bear market."

Exchange Response

Binance discovered the misconduct during routine surveillance and took action in March 2025. The exchange banned Web3Port, froze the market maker's remaining proceeds, and notified Movement Foundation. This was notable because Binance rarely publicly addresses market-making irregularities.

Coinbase announced on May 1 that MOVE would be suspended effective May 15, citing failure to meet listing standards. The exchange moved order books to limit-only mode, effectively strangling liquidity before the formal suspension.

The exchange actions validated what on-chain analysts had suspected for months. Crypto sleuth ZachXBT had linked suspicious activity to Web3Port well before the official investigation concluded.

Leadership Collapse and Rebrand

Movement's response escalated rapidly once the CoinDesk investigation went public. On May 2, the company suspended Manche pending a third-party review by blockchain intelligence firm Groom Lake. Five days later, he was terminated.

Co-founder Cooper Scanlon also stepped down as CEO. The company announced a complete rebrand to Move Industries, with Torab Torabi appointed as new CEO and Will Gaines as President. Both had held junior positions at Movement Labs before the shakeup.

The new leadership promised improved governance, transparent town halls, and rigorous vetting systems. They characterized the rebrand as a return to "crypto's radical roots" focused on technology and community rather than hype.

The $38 Million Buyback

Movement announced a "strategic reserve" of $38 million USDT, conveniently matching the exact amount extracted by Web3Port. This fund was intended to restore liquidity and support the token price.

The buyback represented an admission that retail investors had been harmed. Whether $38 million could meaningfully impact a token that had lost over $2 billion in market cap remained questionable.

Movement also committed to reallocating tokens identified as belonging to Sybil attackers from the delayed MoveDrop airdrop toward ecosystem rewards, though specifics remained unclear.

What It Means for MOVE Holders

The scandal fundamentally changed MOVE's investment thesis. Before April 2025, traders could evaluate Movement based on its Move programming language advantages, MoveStack technology, and ecosystem growth. Now, governance risk dominates any analysis.

Ongoing concerns include:

Monthly token unlocks continue releasing 50 million MOVE (0.5% of supply) through November 2025, creating persistent sell pressure regardless of project fundamentals.

The new leadership team lacks the profile and track record of the original founders. Whether Torabi and Gaines can execute on the technical roadmap remains unproven.

Trust recovery typically takes years in crypto markets. Projects that survive similar scandals often trade at permanent discounts to their pre-scandal valuations.

Over 160 projects committed to building on Movement's infrastructure. How many remain committed after watching the foundation's governance failures is unknown.

Trading MOVE After the Scandal

The scandal created both risks and opportunities. MOVE trades near all-time lows, meaning much of the governance failure is priced in. Technical developments continue under new leadership, and the underlying Move language advantages haven't changed.

For traders considering positions, the key variables to monitor include ecosystem developer retention, exchange relisting decisions, and whether the new leadership delivers on transparency promises. The price prediction outlook depends heavily on execution under Move Industries.

LeveX offers both spot and futures trading for MOVE, allowing traders to express views in either direction based on their assessment of recovery prospects.

A Cautionary Tale for Crypto Governance

The Movement scandal exposed how quickly promising projects can unravel when governance fails. A $3 billion valuation prospect became a sub-$100 million market cap within months, destroying wealth for thousands of retail investors while insiders extracted tens of millions.

The lessons are clear: market-making agreements matter, internal objections deserve attention, and middlemen with no digital footprint shouldn't control 5% of a token's supply. Whether Move Industries can rebuild from this wreckage depends on consistent execution and time.

For the broader industry, Movement joins a long list of projects where governance failures overshadowed technical merit. Traders should weight governance quality alongside technical analysis when evaluating any token position.

Explore Movement and other Layer 2 projects through our Crypto in a Minute educational series, or monitor MOVE price action on LeveX's trading platform.