Movement Co-Founder Rushi Manche Suspended Following Market Maker Scandal
Another crypto exec bites the dust—this time over alleged market manipulation. Movement’s Rushi Manche faces immediate suspension as regulators circle.
When will they learn? Flashy trading strategies always end the same way: with lawyers and liquidations.
The exposé
CoinDesk’s piece revealed that Web3Port had initially floated a contract with Movement Foundation that included a clause allowing the market maker to liquidate its MOVE positions on the condition that the token reached a $5 billion FDV, then shared profits on a 50-50 basis.
Movement initially pushed back against the contractual agreements. Yet, after some revisions, the resulting signed agreement retained the market maker’s ability to “sell tokens for a profit,” CoinDesk reported.
According to Movement Foundation’s general counsel YK Pek, the renegotiated agreement used a “variable interest” mechanism, where a portion of tokens would be loaned to Web3Port only when the token price exceeded a certain rate.
Loading Tweet..This was an improvement over the previous proposed clause that would not require the market maker to sell any tokens below a $5b FDV price. It helped to solve for the “incentive misalignment with a hard dump figure at 5bn,” Pek said in the X post.
Web3Port’s contract with Movement Foundation was brokered through Rentech, a questionable middleman entity that looks to be a Web3Port subsidiary.
The real controversy, Movement Foundation’s general counsel YK Pek said, was that the foundation was misled into entering an agreement under a false impression, rather than on the terms themselves.
Disclosure: Blockworks co-founder Jason Yanowitz is an angel investor in Movement Labs.
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