Shocking: Movement Labs Terminates Co-Founder Rushi Manche Amid Market Maker Controversy

The world of crypto often sees rapid shifts, and recent news from Movement Labs is a prime example. The project has made headlines with the abrupt termination of its co-founder, Rushi Manche. This significant leadership change comes in the wake of a contentious market maker deal that sparked considerable crypto controversy and negatively impacted the project’s token.

Why Movement Labs Terminated Rushi Manche

Movement Labs confirmed the decision to terminate co-founder Rushi Manche via an announcement on May 7. The project cited controversies surrounding a market maker deal brokered by Manche as the primary reason. This termination follows an earlier suspension of Manche announced at the beginning of the month.

The core issue stems from an agreement orchestrated by Manche with Rentech, which subsequently involved the market maker Web3Port. According to reports, after this deal concluded, Web3Port sold a significant amount of MOVE tokens – approximately 66 million, representing about 5% of the total supply. This action reportedly resulted in substantial downward price pressure, estimated at $38 million, back in December 2024.

Adding to the project’s challenges, Coinbase recently suspended the Movement Network (MOVE) token, citing a failure to meet its listing standards. While not directly tied to the market maker deal, it occurred around the same time as the internal issues became public.

Movement Labs Launches Move Industries

Alongside the termination of Rushi Manche, Movement Labs announced a strategic pivot and the launch of a new firm: Move Industries. This new entity will be led by former Movement Labs employees, with Torab Torabi stepping in as CEO and Will Gaines as Chief Marketing Officer.

The leadership stated that the creation of Move Industries was necessary for a “clean break” following the recent events. They emphasized a commitment to the community and builders, promising several key improvements:

• Improved governance structures with new leadership.
• Increased transparency through upcoming town halls.
• Better vetting and verification procedures for future partnerships.
• An evolved leadership philosophy aimed at returning to crypto’s foundational principles.

This move signals a clear effort by the remaining team to rebuild trust and redefine the project’s direction after the fallout from the controversial market maker agreement.

The Market Maker Dilemma: Liquidity vs. Manipulation

The situation at Movement Labs highlights the double-edged sword that is the crypto market maker. These firms are crucial for providing liquidity, enabling smooth trading, and facilitating exchange listings. However, the same power to influence markets can be misused, leading to accusations of manipulation.

The alleged actions of Web3Port in selling a large token volume illustrate how a poorly structured or executed deal with a market maker can severely damage a project’s token price and reputation. An investigation into the Rentech/Web3Port agreement orchestrated by Manche is currently underway, conducted by private intelligence firm Groom Lake.

This isn’t an isolated incident. The crypto space has seen numerous accusations against market makers:

• Creditors of Celsius Network claimed Wintermute was involved in wash trading the CEL token.
• Fracture Labs sued Jump Crypto, alleging a pump-and-dump scheme involving its DIO token.
• DWF Labs faced reports of engaging in market manipulation and inflating trading volumes, though they denied the accusations.

Regulators are also increasing scrutiny. The US has even created fake digital assets to identify market manipulation, leading to actions like the recent fine against CLS Global for fraudulent trading volume manipulation.

The crypto controversy surrounding market makers underscores the critical need for projects to exercise extreme caution and conduct thorough due diligence when entering into such agreements. The wrong partner can indeed make or break a token.

Conclusion: A New Chapter for Movement Labs?

The termination of Rushi Manche and the launch of Move Industries mark a pivotal moment for the project. While the fallout from the controversial market maker deal and the associated crypto controversy has been significant, the creation of a new entity with a stated focus on improved governance and transparency suggests an attempt to move forward. The ongoing investigation will likely shed more light on the events, but for now, the team is signaling a commitment to a fresh start and a return to community-focused development.