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

Movement Labs, the blockchain infrastructure startup behind modular execution layers and the Move programming language, has suspended co-founder Rushi Manche amid an escalating controversy. The startup is also being investigated by Groom Lake, an independent digital asset risk and compliance firm, for a broader review of its internal processes and decision-making protocols.

This development follows reports of suspicious trading activity by a market maker linked to Web3Port. According to crypto analytics platform TokenInsight, around 66 million MOVE tokens were sold in a short span after the token’s launch in December 2024. These trades generated significant profits, reportedly exceeding $38 million.

However, the massive dump triggered a substantial drop in MOVE’s price, which had been rallying strongly due to the anticipation for Movement Labs’ Layer 2 rollups. As the token’s value plummeted, investors grew alarmed, sparking allegations of market manipulation and insider trading.

According to reports by crypto news outlets, the market maker in question had privileged access to the tokens during the early distribution phase, further fueling speculation about Movement Labs’ governance and the transparency of its tokenomics.

In response to the unfolding events, sources close to the company revealed that Manche’s suspension is part of a broader investigation into the suspicious trading activity and its implications for Movement Labs’ broader strategy.

The controversy took a more serious turn with Coinbase’s announcement to suspend trading of the MOVE token. The exchange, known for its stringent listing standards and diligence in vetting new assets, cited concerns about the asset’s compliance with these standards.

Coinbase’s decision, which comes amid increased scrutiny on centralized exchanges, is likely to have a significant impact on the MOVE token’s visibility, liquidity, and overall market presence. It also raises questions about Movement Labs’ ability to maintain the trust of both centralized and decentralized partners in the wake of the unfolding controversy.

After Coinbase announced the delisting of the MOVE token due to high volatility and concerns over the integrity of the market, the token’s price dropped an additional 14%.

This price crash, which comes amid a broader selloff in the cryptocurrency market, is likely to deepen the crisis for Movement Labs as it faces multiple challenges on both the technical and institutional fronts.

To address the growing concerns, Movement Labs has engaged Groom Lake to conduct a third-party governance audit. The scope of the review includes examining token distribution processes, market-making arrangements, internal communications, and decision-making protocols.

This investigation is part of a broader effort by institutions to engage in more transparent and ethical practices within the cryptocurrency industry. As more institutional players like BlackRock and Fidelity enter the space, demands for transparency, fair access, and strong governance are increasing.

Rushi Manche, the co-founder of Movement Labs, is a young entrepreneur who has quickly gained recognition in the Web3 world. At the age of 21, he helped launch a startup that raised $38 million.

However, Manche’s future role in the company remains uncertain as the investigation proceeds. Industry observers will be closely following the outcome of Movement Labs’ internal review and its handling of this crisis.