Recently revealed documents detail how a deal between the Movement Foundation and Web3Port led to a $38 million MOVE token dump.
Movement Foundation (MOVE), backed by the Trump family’s World Liberty Financial, is facing significant controversy over an alleged pump-and-dump scheme. On Wednesday, April 30, reports surfaced of a deal that resulted in a 66 million token dump on the same day the token listed on Binance.
According to a report by CoinDesk, internal documents from the Movement Foundation flagged red flags in its market-making deals. Movement Foundation co-founder Cooper Scanlon stated that more than 5% of MOVE tokens, which had been assigned to the China-based market maker Web3Port, were routed through a little-known entity called Rentech.
Shady contracts led to a $38 million MOVE token dump
Scanlon said the Foundation was led to believe that Rentech was a subsidiary of Web3Port, which was not the case. This arrangement resulted in an unusually large share of tokens being controlled by a single entity. More concerningly, the contract included stipulations that incentivized a pump-and-dump scheme.
Specifically, the contracts allowed Rentech to liquidate all of its MOVE tokens if the fully diluted value exceeded $5 billion. At that point, Rentech would be allowed to dump all the tokens and keep 50% of the profits, with the other 50% going to the Movement Foundation.
This is exactly what happened on December 9, the same day the token launched on Binance. According to the report, Web3Port immediately liquidated its 66 million tokens, worth around $38 million at the time. This caused the token to plunge, and it continued to drop after the launch. Currently, 66 million MOVE tokens are worth just $15.7 million.
Both Movement Foundation and Web3Port have ties to Trump’s World Liberty Financial. On January 28, WLFI bought 3.42 million MOVE tokens for $1.5 million, at $0.439 each, which have since lost more than half of their value. Moreover, Web3Port invested $10 million in WLFI in January.
