Movement Labs, the scandal-plagued crypto startup backed by Donald Trump's World Liberty Financial, quietly promised large stakes of its token to early insiders

Even before its token launch, Movement Labs committed large portions of MOVE's supply to a handful of early advisers — arrangements that were never disclosed to investors

Movement Labs, the crypto startup backed by Donald Trump’s World Liberty Financial, promised large stakes of its token to early insiders in undisciosed deals that now raise fresh questions about who really holds power behind the scenes.

Even before its token launch, Movement Labs committed large portions of MOVE’s supply to a handful of early advisers — arrangements that were never disclosed to investors and only surfaced through internal documents reviewed by CoinDesk.

Two business memos obtained by CoinDesk — one promising a single adviser nearly $2 million a year — show how Movement, founded in 2023 by two 20-year-old Vanderbilt dropouts, leaned heavily on these advisers to gain a foothold in the crypto industry.

Movement Labs said the agreements, dated shortly after the project's founding, were exploratory in nature and non-binding.

The existence of the agreements nonetheless casts new light on the chaotic inner workings of Movement, which came under fire after CoinDesk reported last month that insider market-making deals enabled token dumping by insiders.

The fallout has sparked waves of finger-pointing inside the company, centering on who steered Movement into a predatory agreement with a Chinese market maker under terms that analysts say incentivized predatory selling.

The tension has boiled over into a public rift between co-founders Rushi Manche, who was terminated by Movement Labs this month, and Cooper Scanlon, who stepped back from his CEO role but remains at the company.

“When we started Movement, I was the CTO — leading the engineering team. I left most business decisions, including the contracts, to Cooper,” Manche told CoinDesk when reached for comment. “When priorities changed, our roles changed, but Cooper’s decisions in the early days heavily shaped the way the launch went.”

Shadow advisers

CoinDesk spoke to more than a dozen people familiar with Movement over the course of its investigation, including current and former employees who were granted anonymity so they could speak freely.

The agreements obtained by CoinDesk concern Sam Thapaliya and Vinit Parekh, both of whom played behind-the-scenes roles in shaping the project during its early stages. Together, they were allocated access to as much as 10% of the total MOVE token supply in signed memoranda of understanding that insiders say were intentionally kept off the books.

Thapaliya, the CEO of Zebec Protocol and an early advisor to Manche and Scanlon, was loaned 5% of MOVE’s supply for marketing and market-making purposes, according to one of the agreements obtained by CoinDesk. A second agreement allocated Thapaliya 2.5% of the token's total supply, worth more than $50 million at recent prices.

Movement Labs told CoinDesk the signed agreements with Thapaliya were not binding, but Thapaliya claimed the agreements "were never voided."

While framed as memoranda of understanding — normally considered non-binding — the agreements examined by CoinDesk also include provisions stating "both parties" must consent to their termination.

"I plan on pursuing legally to exercise my claim to retrieve 2.5% of tokens," Thapaliya said.

Employees at Movement referred to Thapaliya as a “shadow co-founder” and said he was often consulted by Scanlon and Manche for major decisions.

His name also surfaced in internal communications regarding Movement’s deal with Web3Port. The Chinese market maker was later blamed for dumping $38 million in tokens after MOVE’s debut — an event that triggered a sell-off and Binance account bans.

The amount loaned to Web3Port, 5% of MOVE's supply, was identical to the amount loaned to Thapaliya per the agreement.

When contacted by CoinDesk in advance of the initial investigation, Thapaliya denied having any financial interest in Movement Labs or the Movement Foundation. He also denied involvement in the Web3Port deal.

In later messages on Signal, Thapaliya told CoinDesk that his work with Movement was consistent with their agreement: “As per the contract signed in February 2023, I fulfilled the agreed terms by supporting Cooper [Scanlon] in exchange-related discussions, strategizing token allocation, assisting with market maker selection, and helping hire the team that audited his airdrop model.”

Memoranda of understanding

The use of informal agreements to quietly allocate tokens to insiders reflects a broader pattern within the crypto industry, where large sums can change hands without appearing in official fundraising disclosures.

In 2024, CoinDesk reported that Eclipse — another project linked to Thapaliya — secretly allocated 5% of its token supply to an employee at Polychain, a major crypto venture firm that later invested in the project. Polychain is also an investor in Movement Labs. Eclipse's deal with the Polychain employee was scrapped following the publication of CoinDesk's investigation.

What these cases illustrate is not necessarily fraud, but the ease with which crypto startups can make significant financial commitments behind closed doors — commitments that can