Original article: Sam Kessler , CoinDesk
Compiled by Aki Chen, Wu Talks Blockchain
It is reported that the Layer 2 blockchain project Movement Labs is investigating a suspected fraudulent market-making agreement. An arrangement originally intended to promote the smooth listing of MOVE crypto tokens eventually evolved into a sell-off scandal that shook the market. The agreement allegedly handed over the control of 66 million MOVE tokens to an unclear intermediary agency Rentech without the full knowledge of the project party. Rentech played the dual roles of "Web3Port subsidiary" and "foundation agent" in the agreement and was suspected of self-dealing. The arrangement directly triggered a wave of token sales worth $38 million the day after MOVE went online, causing a sharp drop in the coin price and leading to a ban on Binance.
Despite clear internal opposition to the agreement, senior management still pushed for its signing, raising serious concerns about governance failure, lack of due diligence, and conflicts of interest. Currently, many senior executives and legal advisors are under investigation, and the project governance structure and cooperation mechanism are being questioned comprehensively. This crisis has revealed deep loopholes in Movement's system design, risk control, and compliance capabilities, which may have a long-term impact on its future reputation and ecosystem construction.
MOVE tokens plummeted immediately after launch; Movement Labs was suspected of being misled into signing a high-risk agreement
Movement Labs, the blockchain project behind the MOVE cryptocurrency, is conducting an internal investigation into a controversial financial agreement that could have given a single entity majority control over the token market without the project’s full knowledge, creating a structural imbalance, according to internal documents reviewed by CoinDesk.
The agreement directly led to the concentrated selling of 66 million MOVE tokens the day after they were listed on the exchange on December 9, 2025, triggering a cliff-like drop in the price of the token and causing widespread market doubts about "insider trading" and profit transfer. It is worth noting that the MOVE project has been publicly endorsed by World Liberty Financial, a crypto venture capital fund supported by Trump, making this event more politically and industrially influential.
Cooper Scanlon, co-founder of Movement Labs, said in an internal Slack announcement on April 21 that the team is investigating a key issue: how more than 5% of MOVE tokens originally reserved for market maker Web3Port were transferred to an intermediary called Rentech.
The Movement Foundation was allegedly initially told that Rentech was a subsidiary of Web3Port, but an investigation revealed that this was not the case. Rentech has denied any misleading behavior.
Rentech unilaterally controls nearly half of the circulating stock, and the circulation structure of MOVE tokens is unbalanced
According to an internal memo from the Movement Foundation, the agreement signed by Movement and Rentech lent about half of the total circulating supply of MOVE tokens to this single counterparty. This arrangement gave Rentech an unusual amount of market influence in the early stages of the token’s launch.
Many industry experts interviewed pointed out that this centralized structure seriously deviates from the decentralized distribution principle that crypto projects usually pursue, and can easily be used to manipulate coin prices or achieve unilateral arbitrage.
After reviewing a version of the contract obtained by CoinDesk, veteran crypto industry founder Zaki Manian pointed out that some of the clauses included in the agreement essentially set clear incentives for "artificially driving up the fully diluted valuation (FDV) of MOVE tokens to over $5 billion and then selling them to retail investors for profit."
He said bluntly: "Even if such discussions only appear in written documents, it is shocking." This comment further exacerbated the outside world's doubts about the purpose and ethical bottom line of the Rentech agreement.
In theory, market makers are employed by the project party to provide liquidity services for newly launched tokens. Their responsibility is to buy and sell on the exchange with funds provided by the project party to maintain price stability and market depth. However, in practice, this role also has the risk of abuse.
Once there is a lack of supervision or the agreement is opaque, market makers may become a tool for insiders to manipulate the market and quietly transfer large token holdings without being easily detected by the outside world, thereby seriously damaging the interests of ordinary investors and market fairness.
Contracts expose crypto gray areas: how public projects become arbitrage tools for a few in a regulatory vacuum
A series of contract documents obtained by CoinDesk revealed a little-known gray area in the crypto industry: in the absence of effective supervision and legal transparency, blockchain projects originally intended for the public can easily be used as a vehicle for a few people behind the scenes to make private profits.
The contents of these agreements show that once the project party is negligent in structural design and compliance control, the so-called "decentralized" project may be completely privatized by a small number of operators through unequal terms, deviating from the original intention of fairness and openness.
In the crypto market, there have been rumors of manipulation and abuse of market-making mechanisms, but the specific details of the relevant operations, contract structures, and interest arrangements are rarely made public. For this reason, the internal contract and agreement details disclosed by Movement Labs in this incident have become a rare window to observe the black box operation of Web3 projects and the gray area of market making, and have once again focused the industry on "transparency", the most basic but most often overlooked principle.
The market-making contract reviewed by CoinDesk shows that Rentech appeared in two identities in the transaction with the Movement Foundation: on the one hand, it acted as an agent of the Movement Foundation, and on the other hand, it signed the agreement as a subsidiary of Web3Port. This structure makes it possible for Rentech to occupy the "intermediary dominance" in the transaction, theoretically enabling it to set the terms of the transaction and profit from information asymmetry.
The market-making agreement reached between Movement and Rentech ultimately opened a sell-off channel for a group of wallets associated with Web3Port. The Chinese financial institution claims to have served MyShell, GoPlus Security, and World Liberty Financial, a crypto fund associated with Donald Trump. These wallets quickly liquidated a total of approximately $38 million worth of tokens the day after the MOVE token was first launched on the exchange, causing sharp market fluctuations and raising questions about the motivation and legitimacy of the agreement arrangement itself.
Binance bans market making accounts due to "violations", Movement urgently launches token buyback
After the incident fermented, the mainstream exchange Binance has banned the market-making account involved, citing "inappropriate behavior". At the same time, the Movement project team urgently announced the launch of a token repurchase plan in an attempt to stabilize market sentiment and regain community trust.
Similar to the employee stock option mechanism of start-up companies, most crypto projects set a lock-up period when distributing tokens, aiming to restrict the core team, investors and early participants from selling large holdings in the initial trading stage of the project.
This mechanism is intended to protect market stability and prevent insiders from taking advantage of information to make profits in advance. However, in the Movement incident, the liquidity arrangement of the relevant tokens to bypass the lock-up restrictions is the core issue that has aroused doubts from the outside world.
Binance's ban on the accounts involved quickly sparked speculation in the community, with many observers believing that this might mean that an agreement had been reached privately between Movement project insiders and Web3Port to sell tokens in advance, bypassing the normal lock-up mechanism.
Movement denied the allegations, insisting that it had not entered into any illegal transfer arrangements with any third party. However, the confusion of information and the defects in the contract structure exposed by the incident still make it difficult to completely eliminate the impression of "insider trading".
Star Layer 2 project is mired in controversy, with multiple parties accusing each other behind the Rentech agreement
Movement is an Ethereum expansion Layer 2 network built on Facebook's open source language Move. Due to its technological innovation and capital support, it has quickly become one of the most discussed emerging projects in the crypto industry in recent years.
The project was founded by two 22-year-old co-founders, Rushi Manche and Cooper Scanlon, who dropped out of Vanderbilt University. It has received $38 million in financing and was selected into the Trump-backed World Liberty Financial crypto portfolio. In January 2025, Reuters reported that Movement Labs was about to complete a new round of financing of up to $100 million, with a valuation of up to $3 billion.
But there are clear divisions within the project over the controversial market-making agreement with Rentech. CoinDesk spoke to more than a dozen people with knowledge of the project (most of whom requested anonymity) who provided conflicting accounts.
Rentech owner Galen Law-Kun has denied any misleading and said the deal structure was designed in coordination with Movement Foundation general counsel YK Pek. But internal memos and correspondence reviewed by CoinDesk show that Pek initially strongly opposed the agreement and denied any involvement in the formation of Rentech.
Movement Labs co-founder Scanlon said in an internal Slack message: "Movement is the victim in this incident." This statement also indicates that the project party is trying to direct the responsibility to the external operator.
According to four sources familiar with the internal investigation who spoke on condition of anonymity, Movement is focusing on the role of its co-founder Rushi Manche in the Rentech agreement, who was allegedly the person who initially forwarded the agreement to the team and pushed for the partnership within the organization.
Also included in the investigation is Sam Thapaliya, the founder of the crypto payment protocol Zebec and business partner of Rentech owner Galen Law-Kun. Although Thapaliya does not hold an official position at Movement, he has long been involved in core affairs as an "informal consultant", and his specific influence in this incident has become one of the focuses of the project's internal audit.
Rejected first and then signed, Movement bypassed the prudential mechanism to accept high-risk agreements, and its governance structure was questioned
Despite initially rejecting a market-making agreement with Rentech that entailed significant risks, Movement ultimately signed a revised agreement with a similar structure that relied heavily on verbal assurances from an intermediary with little public record.
This decision highlights the shortcomings of the current governance structure of the crypto industry. According to common practice, in order to avoid securities regulatory risks, crypto projects usually split their operations into two entities: a non-profit foundation responsible for token management and community resource allocation, and a for-profit development company responsible for underlying technology development. Movement Labs is the development entity of the project, while the Movement Foundation is responsible for token affairs.
But internal communications reviewed by CoinDesk show that the structure that was supposed to operate independently actually failed in the Movement case. Although co-founder Rushi Manche was nominally an employee of Movement Labs, he played a leading role in key matters of the nonprofit foundation. This overlap of functions has deprived the dual-entity mechanism, which is supposed to prevent compliance risks, of its proper checks and balances.
On March 28, 2025, co-founder Rushi Manche sent a draft market-making agreement to the Movement Foundation via Telegram message, stating that the contract “needs to be signed as soon as possible.”
On November 27, 2025, Rentech proposed a draft market-making agreement to Movement, which included lending up to 5% of the total MOVE tokens to Rentech. According to the contract, Rentech is the borrower and Movement is the lender. However, the agreement was not signed in the end.
As a company with almost no public background and on-chain records, Rentech's large token loan request immediately aroused internal vigilance within the foundation. Movement Foundation legal counsel YK Pek bluntly stated in an email that the document "may be the worst agreement I have ever seen." He further pointed out in another memorandum that if the agreement is executed, it is equivalent to handing over the actual control of the MOVE market to an external entity with unclear identity.
In addition, Marc Piano, a director of the foundation registered in the British Virgin Islands, also refused to sign the agreement. The above objections show that Movement has a very clear understanding of the risks of the agreement, but it still failed to prevent the agreement from being implemented in a variant form in the subsequent process, further exposing the problem of governance failure.
One particularly striking clause in the contract stipulates that once the fully diluted valuation (FDV) of MOVE tokens exceeds $5 billion, Rentech can begin liquidating its tokens and split the resulting profits with the Movement Foundation in a 50:50 ratio.
Zaki Manian, a veteran in the crypto industry, pointed out that this structure essentially creates a "distorted incentive mechanism" that encourages market makers to artificially push up the price of MOVE so that they can sell off their huge holdings in a concentrated manner when the valuation is inflated and make profits. This design not only deviates from the original intention of market making to serve price stability, but is also likely to directly harm the interests of retail investors.
Although the Movement Foundation initially refused to sign a high-risk market-making agreement, its negotiations with Rentech continued. According to three people familiar with the matter interviewed by CoinDesk and legal documents reviewed by CoinDesk, Rentech subsequently claimed to the foundation that it was a subsidiary of Chinese market maker Web3Port and offered to provide $60 million in collateral funds, thereby increasing the attractiveness of the agreement.
Driven by the above conditions, the Movement Foundation accepted a revised agreement on December 8, 2025. This version modified some key terms and deleted one of the most controversial contents - if the MOVE token failed to be listed on a specific exchange, Web3Port could sue the Movement Foundation for compensation.
Although the agreement was adjusted in form, this compromise decision showed that the foundation still relaxed its risk prevention stance in the face of pressure and inducements from multiple parties, which ultimately laid hidden dangers for subsequent events.
On December 8, 2025, the Movement Foundation and Rentech officially signed a revised market-making agreement. Although Rentech is clearly marked as "Web3Port" in the agreement (the name has been censored in some documents), its identity as a borrower has not changed, and the Foundation is still the lender.
It is noteworthy that the main drafter of the agreement was YK Pek, the legal counsel of the foundation who had previously explicitly opposed the initial version of the agreement. Although some of the most controversial clauses were deleted after the revision, the core structure remains unchanged: Web3Port can still borrow 5% of the total supply of MOVE tokens and sell them in a certain way to achieve profit.
Further technical information reveals the deliberate nature of the operation behind the agreement - the domain name "web3portrentech.io" registered under the email address of a Rentech director was registered on the day the agreement was signed.
The agreement was signed before the foundation was informed
According to three people familiar with the matter, when the Movement Foundation signed the formal agreement on December 8, 2025, it was unaware that Web3Port had signed a similar cooperation agreement with the nominal "Movement" several weeks earlier.
This "advance agreement" not only did not go through the foundation's formal process, but also bypassed the necessary compliance review and governance mechanisms.
According to a contract dated November 25, 2025 obtained by CoinDesk, Web3Port had signed a highly similar market-making agreement with Rentech long before the Movement Foundation officially signed the contract. In the agreement, Rentech was marked as the lender, Web3Port as the borrower, and Rentech was directly referred to as the representative of "Movement" in the document.
This “shadow agreement” almost replicates the original proposal that the foundation subsequently rejected, indicating that some key arrangements have already been implemented through informal channels without the foundation’s approval process. This discovery confirms the existence of multiple “power channels” within the project.
This early agreement signed on November 25 is structurally consistent with the contract that was rejected on November 27, and the core terms still clearly allow market makers to perform liquidation operations when the price of MOVE tokens reaches a certain threshold.
This setting is regarded by industry insiders such as Zaki Manian as a core mechanism with "high manipulation risk" - that is, to extract profits by artificially pushing the price to the target and then selling it in a concentrated manner. This shows that even in the subsequent versions after the surface modification, some key stakeholders behind the project have always been promoting a set of operation paths with built-in arbitrage incentives, without substantially eliminating the fundamental risks.
“Shadow co-founder”? The man behind the scenes has surfaced, and the founder of Zebec is said to be deeply involved in the design of the protocol structure
Sources close to the Movement project told CoinDesk that there is still much speculation about the true mastermind of the Rentech protocol. The initial version of the protocol, which is believed to have directly led to the massive sell-off of MOVE tokens in December and the public opinion storm, was circulated internally by co-founder Rushi Manche, who pushed it into the decision-making process.
According to Blockworks, Manche was briefly suspended last week for the agreement in question. Manche responded that in the process of selecting market makers, MVMT Labs has always relied on the foundation team and multiple consultants for advice and assistance, "but it now appears that at least one member of the foundation represents the interests of both parties to the agreement, which has become the focus of our current investigation."
At the same time, another key figure, Sam Thapaliya, has also attracted great attention. Thapaliya is the founder of the encrypted payment protocol Zebec and a long-term advisor to Manche and co-founder Scanlon. He was copied in many emails between Web3Port and Movement, and appeared in important communication links with Rentech and Manche.
This clue reinforces the outside world's suspicion that Thapaliya may play a "behind-the-scenes" role in the design of Rentech's structure - he may not be a simple consultant, but a "shadow co-founder" who dominates the protocol architecture and deeply intervenes in decision-making.
According to several Movement employees, Zebec founder Sam Thapaliya may play a role far beyond his advisory role in the project. Some people call him "Rushi (Manche)'s close advisor, a kind of shadow third co-founder", and point out: "Rushi has always been very secretive about this relationship, and we usually only hear his name occasionally."
Another employee said: "There are many times when we have agreed on something, but there are always changes at the last minute, and when these times we usually know that it may be Sam's opinion."
Three witnesses confirmed that Thapaliya was at Movement’s San Francisco office on the day the MOVE token was launched to the public. CoinDesk also reviewed multiple Telegram screenshots showing that co-founder Scanlon had commissioned Thapaliya to help screen the MOVE airdrop list — a highly sensitive part of the project’s community token distribution mechanism.
Such arrangements have further deepened the impression of some team members: Thapaliya's actual influence on the project is far deeper and more hidden than his public identity suggests. In response to this, Thapaliya said in a response to CoinDesk that he met Manche and Scanlon in college and has been involved in the project as an external consultant since then, but he "does not hold shares in Movement Labs, does not receive tokens from the Movement Foundation, and does not have any decision-making power."
Who is Rentech? The mysterious intermediary agency is full of disputes, and the founder and the project's legal advisor accuse each other
Rentech, the company at the center of the MOVE token controversy, was founded by Galen Law-Kun — a business partner of Zebec founder Sam Thapaliya. Law-Kun told CoinDesk that Rentech is a subsidiary of his Singapore-registered financial services company Autonomy, and aims to bridge the gap between crypto projects and Asian family offices.
Law-Kun claims that YK Pek, the Movement Foundation’s general counsel, not only helped set up Autonomy SG, but was also the general counsel for that company (or its affiliate) Rentech. He also claims that despite Pek’s strong internal opposition to the Rentech agreement, he actually helped design Rentech’s structure and participated in drafting the initial version of the market-making agreement, “which was almost identical to the contract version he later formally drafted for the Foundation.”
However, CoinDesk’s investigation did not find direct evidence that Pek worked at Autonomy or drafted any Rentech-related contracts in that capacity.
In response, Pek said: "I have never been and have never been the general counsel of Galen or any of its entities." He explained that a corporate secretarial services company he co-founded did provide secretarial services to two companies under Galen, but these two companies were not Rentech, and they both declared "no assets" in their 2025 annual audits.
Pek further stated that he had spent two hours in 2024 reviewing Galen's consulting agreement with a project, and only provided free advice on the FTX case deadline and NDA documents. "I completely don't understand why Galen claims that I am his general counsel, which makes me confused and uneasy."
Pek also pointed out that the legal team of Movement Foundation and Movement Labs was introduced to GS Legal, the lawyers hired by Rentech, by co-founder Rushi Manche.
According to Galen, Pek was introduced to 10 different projects as "Autonomy's legal advisor" and never denied the title; as for GS Legal's involvement, "it was just a formal process completed at the request of Movement."
After the incident broke out, Movement Labs co-founder Cooper Scanlon emphasized in an internal Slack notice that the company has hired an external audit firm, Groom Lake, to conduct an independent third-party investigation into the anomalies in recent market-making arrangements. He reiterated: "Movement is a victim in this incident."
This series of mutual denials and accusations exposed the intricate interpersonal and legal relationships behind Rentech, and also pushed the MOVE incident further from a market event to the core vortex of trust crisis and governance fault.
