One of the most anticipated Layer 2 projects in recent times – Movement – is caught in a storm less than half a year after its launch. Recent revelations have unveiled a serious financial scandal involving the MOVE token, with allegations of price manipulation, internal leaks, and shady market contracts leading to a dump of 38 million USD just one day after listing.
Rentech: The shadowy 'intermediary' manipulating 66 million tokens
According to leaked internal information, #MovementLabs is investigating the possibility that they were tricked into signing a market-making contract with an entity named Rentech — a name that has almost no trace online. This contract granted control over 66 million MOVE tokens (equivalent to more than 5% of the total supply) to Rentech, and it was this contract that triggered the sell-off that caused the MOVE price to plummet after the first day of listing on December 9.
Notably, Rentech appears in the contract in both roles: as a representative of Web3Port — the market maker — and as a 'representative' of the Movement Foundation. The fact that one party signed a contract playing both sides is a clear sign of self-dealing behavior and serious conflicts of interest.
An internal memo from the Movement Foundation calls this 'one of the worst contracts ever seen', while many external experts warn that this contract created a clear incentive to push the MOVE price to an unusually high valuation (over 5 billion USD FDV) and then dump it all on retail investors to share the profits.
38 million USD 'evaporated' after 24 hours and the ban from Binance
Just one day after the token $MOVE was listed on exchanges, wallets associated with Web3Port dumped 66 million MOVE tokens — worth 38 million USD — shocking the market. After the incident, Binance banned this market-making account for 'misconduct'.
To salvage the situation, Movement announced a plan to buy back tokens while denying any direct link to this behavior. However, the contract allowed tokens to be dumped immediately, not adhering to the customary lock-up period in crypto projects, raising many questions among investors about the transparency of the management team.
Internal conflicts and a crisis of trust
The scandal not only caused the MOVE token to plummet but also exposed deep divisions within Movement. Founders, legal advisors, and external advisory teams were all put under scrutiny. Some insiders had previously warned about the abnormal nature of the contract with Rentech, but it is unclear why the contract was still approved.
On the internal Slack on April 21, co-founder Cooper Scanlon stated that the team is investigating why an entity like Rentech — which is believed to be a subsidiary of Web3Port — was granted control over a large amount of tokens, while it seems that this is not the case. Rentech denies any fraudulent behavior.
The market is manipulated under the guise of 'market maker'
In the crypto world, market makers play a role in providing liquidity and stabilizing prices. However, this position can also be abused to manipulate the market and quietly extract money from retail investors.
According to an industry veteran — Zaki Manian — the terms of the MOVE contract are not only controversial but also 'so outrageous that merely discussing them is alarming'. He pointed out that the parties designed the contract with a clear goal of inflating the token price to take profits.
The project was once backed by World Liberty Financial
Movement was once considered one of the promising Layer 2 projects thanks to Move technology (the programming language originally developed by Facebook) and was backed by World Liberty Financial — a crypto alliance supported by former President Donald Trump.
However, after this scandal, the project's reputation is under serious threat. Binance has taken drastic action, the community has lost trust, and the leadership team is suspected of lacking risk management capabilities and ethical standards.
Impact on the crypto market and Binance users
The MOVE token incident serves as a warning to investors on Binance and the entire crypto market about the risks of participating in new projects that have not been thoroughly vetted. Although MOVE is not yet a popular asset on Binance, the price crash due to internal manipulation can negatively affect overall trust in new Layer 2 projects.
Binance, with increasingly strict policies against opaque market-making activities, will have more reasons to tighten partner vetting and the listing mechanism for new tokens. Users on the exchange also need to be extremely vigilant about unusual rapid price increases, as there may be a pre-arranged 'dump scenario' behind it.
Conclusion
The Movement scandal is a classic example of how the crypto market remains highly vulnerable to opaque behaviors, especially when regulations are unclear and trust is misplaced. While MOVE may technically recover in the future, the stain from the Rentech contract will haunt the project for a long time.
Risk warning: Investing in cryptocurrency carries significant risks and is not suitable for everyone. Asset prices can be highly volatile and may lose all value. Please do your research and only invest money that you can afford to lose.