Movement Labs Suspends Co-Founder Rushi Manche Amid MOVE Token Controversy

Movement Labs, a blockchain infrastructure startup focused on modular execution layers and the Move programming language, has suspended its co-founder Rushi Manche amid an escalating controversy surrounding the launch and subsequent price crash of the MOVE token. The internal decision comes on the heels of an investigation into suspicious trading activity linked to a market maker tied to Web3Port.

Reports indicate that approximately 66 million MOVE tokens were sold shortly after the token’s December 2024 launch, resulting in profits exceeding $38 million. This massive dump triggered a significant drop in MOVE’s price, alarming investors and sparking allegations of market manipulation and insider trading. The token, which was initially backed by strong momentum and a strategic vision around scalable Layer 2 rollups, quickly found itself at the center of a reputational storm.

Sources close to the situation suggest that the market maker in question had privileged access to the tokens during the early distribution phase. This raised questions about Movement Labs’ governance and the transparency of its tokenomics. In response, the company moved swiftly to suspend Manche pending the outcome of a broader review.

Coinbase Delisting Escalates Fallout

The controversy took a more serious turn when Coinbase, one of the largest cryptocurrency exchanges in the world, announced that it would suspend trading of the MOVE token. The platform cited concerns about the asset’s compliance with listing standards, particularly surrounding its volatility and the integrity of its market.

The delisting not only impacted the token’s visibility and liquidity but also cast doubt on Movement Labs’ ability to uphold the trust of centralized and decentralized partners alike. MOVE’s price dropped an additional 14% in the aftermath, deepening the crisis for the firm.

To address the growing concerns, Movement Labs has initiated a third-party governance audit led by Groom Lake, an independent digital asset risk and compliance firm. The scope of the review includes token distribution processes, market-making arrangements, internal communications, and decision-making protocols.

Industry-Wide Implications

The incident underscores the broader challenges facing crypto startups that seek rapid scaling while managing complex token ecosystems. As more institutional players enter the space, demands for transparency, fair access, and strong governance are increasing.

Rushi Manche, once celebrated as a rising star in the Web3 world for helping raise $38 million at the age of 21, now finds himself sidelined. His future role in the company remains uncertain as the investigation proceeds.

For now, the industry watches closely. The outcome of Movement Labs’ internal review and its handling of this crisis could serve as a key litmus test for emerging protocols navigating similar pressures in the current regulatory and market environment.