Behind the Collapse of Movement Tokens: Secret Contracts and Double-Sided Market Making

Original Author: Sam Kessler, Coindesk

Original Title: Inside Movement's Token-Dump Scandal: Secret Contracts, Shadow Advisors and Hidden Middlemen

Translation by: Scof, ChainCatcher

Key Points:

• Movement Labs is investigating whether it was misled into signing a market-making agreement without full knowledge. This agreement granted control over 66 million MOVE tokens to an unidentified intermediary, leading to a massive sell-off worth $38 million immediately after the token's launch.
• Internal contracts reveal that a company with almost no digital footprint, Rentech, appeared on both sides of the transaction: as a subsidiary of Web3Port on one hand, and as an agent for the Movement Foundation on the other, raising questions about "self-dealing."
• Insiders at the Movement Foundation initially warned about the deal, calling it "the worst agreement they had ever seen"; experts pointed out that the agreement might structurally incentivize artificially inflating the token price before dumping it on retail investors.
• This incident exposed serious divisions among Movement's top leadership: executives, legal advisors, and project consultants pushed for the deal despite internal opposition, and their actions are now under comprehensive review.

A financial agreement originally intended to boost the launch of the MOVE cryptocurrency ultimately devolved into a token dump scandal, resulting in Binance banning trading and sparking intense internal disputes.

Contract documents obtained by CoinDesk reveal the crux of the crisis and explain how the situation spiraled out of control.

According to internal documents reviewed by CoinDesk, the blockchain project Movement—developer of the MOVE cryptocurrency—is investigating whether it was induced to sign a financial agreement without full knowledge. This agreement granted a single entity unusually concentrated control over the MOVE token market.

This agreement led to 66 million tokens being rapidly dumped into the market the day after the MOVE token was first listed on exchanges on December 9, causing a price crash and igniting strong suspicions of "insider trading." Notably, the project received backing from World Liberty Financial, a crypto venture capital platform supported by Trump.

Cooper Scanlon, co-founder of Movement Labs, stated in a Slack message to employees on April 21 that the company is investigating why more than 5% of MOVE tokens originally reserved for market maker Web3Port were transferred through an intermediary named Rentech. He pointed out, "The foundation was initially led to believe that Rentech was a subsidiary of Web3Port, but that is clearly not the case." Rentech denies any false statements or misleading actions.

Cooper Scanlon's Slack message. Rentech is misspelled as "Rentek." (Obtained by CoinDesk)

According to an internal memorandum from the Movement Foundation, the contract signed with Rentech effectively lent about half of the publicly circulating MOVE tokens to a single counterparty. This gave that entity an unusually large degree of control over the early-stage token. Multiple experts told CoinDesk that this arrangement is highly unusual.

Even more concerning, a version of the contract obtained by CoinDesk shows it included an incentive mechanism that "induces manipulation of the token price to a fully diluted valuation exceeding $5 billion, then dumps the tokens on retail investors and shares profits proportionally." Veteran crypto project founder Zaki Manian stated after reviewing the documents, "Even just participating in such a black-and-white contract is insane."

Market makers are typically hired to provide liquidity for newly issued tokens, usually trading with borrowed funds from the token issuer on exchanges to stabilize prices. However, this role can easily be abused, allowing insiders to quietly manipulate the market and cash out large amounts of tokens without immediately raising external alarms.

A series of contract documents obtained by CoinDesk reveal the gray areas in the crypto industry characterized by weak regulation and opaque legal structures—these loopholes often turn publicly-facing projects into tools for the benefit of a select few.

While rumors of market-making abuses are common in the crypto space, specific details are rarely made public.

The market-making contract reviewed by CoinDesk shows that Rentech appeared in its agreement with the Movement Foundation as both an agent for the Movement Foundation and a subsidiary of Web3Port—this "dual identity" arrangement theoretically gave it the ability to dictate terms and profit from the deal.

Ultimately, the collaboration between Movement and Rentech led to wallets associated with the Chinese financial company Web3Port rapidly dumping $38 million worth of MOVE tokens the day after the token was listed on exchanges. Web3Port claims to have previously collaborated with projects like MyShell, GoPlus Security, and Trump-backed World Liberty Financial.

Due to misconduct, the exchange Binance subsequently banned the market-making account, and Movement announced it would initiate a token buyback plan.

Similar to stock option mechanisms in startups, crypto projects typically have lock-up periods for tokens to prevent insiders from dumping large amounts during the early trading phase.

However, Binance's ban raised questions about Movement—there is widespread speculation that the project may have reached some sort of early unlocking agreement with Web3Port, although Movement denies this claim.

Mutual Accusations

Movement is one of the most talked-about crypto projects in recent years, positioned as a next-generation Layer 2 blockchain aimed at enhancing Ethereum's scalability based on the Move programming language launched by Facebook.

The project was founded by two 22-year-old dropouts from Vanderbilt University, Rushi Manche and Cooper Scanlon, who successfully raised $38 million, entered the World Liberty Financial portfolio, and garnered widespread attention on social media.

According to a Reuters report from January this year, Movement Labs was nearing completion of a $100 million funding round, potentially valuing it at $3 billion.

CoinDesk interviewed over a dozen insiders familiar with Movement's internal operations (most requested anonymity to avoid retaliation), and there were many conflicting accounts regarding who led the Rentech deal—industry experts generally consider the arrangement highly unusual.

Galen Law-Kun, head of Rentech, denies that the foundation was misled during the signing process and insists that Rentech's overall structure was built with the full assistance of Movement Foundation's general counsel YK Pek.

However, according to an internal email and other communications reviewed by CoinDesk, Pek denied his involvement in the establishment of Rentech and initially strongly opposed the deal.

Movement Labs co-founder Scanlon stated in a message to employees that Movement is "the victim in this incident."

According to four insiders, Movement is also investigating the responsibilities of its co-founder Rushi Manche—he was the one who initially forwarded the Rentech deal to the team and pushed for the proposal internally; additionally, informal advisor Sam Thapaliya, who is also Law-Kun's business partner, is under investigation.

Web3Port did not respond to multiple requests for comment.

"Possibly the Worst Agreement I've Ever Seen"

Although Movement initially rejected the high-risk market-making agreement with Rentech, it ultimately signed a revised version with similar content, relying solely on a guarantee provided by an intermediary with no verifiable record.

In the extremely loosely regulated crypto industry, project teams typically separate their operational structures into a non-profit foundation and a profit-driven development company. The developers (in this case, Movement Labs) are responsible for technical construction, while the foundation manages tokens and community resources.

The two should theoretically remain independent to avoid securities regulatory risks. However, according to internal communications reviewed by CoinDesk, Movement Labs employee Rushi Manche seems to have played a leading role in the non-profit Movement Foundation as well.

Rushi Manche forwarded the first Rentech contract to an employee in the Movement ecosystem. (Obtained by CoinDesk)

On March 28, 2025, Manche sent a draft of a market-making agreement to the foundation via Telegram, stating that it needed to be signed quickly.

On November 27, 2025: Rentech proposed a draft market-making agreement to Movement. In the agreement, Rentech was the borrower, and Movement was the lender. The agreement was ultimately not signed. To protect privacy, CoinDesk has obscured some personal names in the disclosed documents, and some names were already redacted in the original documents.

The draft proposed lending up to 5% of MOVE tokens to Rentech (a company with no digital footprint).

The foundation's legal advisor Pek pointed out in an email that the agreement "might be the worst agreement I've ever seen." In another memorandum, he warned that this move would hand over control of the MOVE market to an unidentified external entity. Marc Piano, a director of the foundation in the British Virgin Islands, also refused to sign the agreement.

Movement Foundation's general counsel YK Pek and director Marc Piano respond to the Rentech agreement (Obtained by CoinDesk)

One highly controversial clause in the contract allowed Rentech to immediately liquidate its held tokens when the MOVE token's "fully diluted valuation" exceeded $5 billion and share profits with the foundation on a 50:50 basis.

Manian pointed out that this design effectively encourages market makers to artificially inflate the token price and then sell large amounts of tokens at a profit.

Although the Movement Foundation ultimately rejected this draft, negotiations with Rentech continued.

According to three individuals familiar with the negotiations and legal documents obtained by CoinDesk, Rentech subsequently claimed to be a subsidiary of the Chinese market maker Web3Port and offered to provide $60 million in collateral out of its own pocket, which somewhat swayed the foundation.

On December 8, 2024, the Movement Foundation finally signed a revised market-making agreement with Rentech, removing some of the most controversial clauses. This included canceling the clause that would allow Web3Port to sue the foundation for compensation if it failed to list MOVE on specific exchanges.

On December 8, 2025, Rentech and Movement reached a revised market-making agreement. In the agreement, Rentech was still the borrower, but its identity was explicitly marked as "Web3Port" (the name has been obscured in the document), while the Movement Foundation was the lender. The agreement has been formally signed. CoinDesk has obscured some personal names in the document for privacy reasons, and some names were already redacted in the original documents.

Although this revised agreement was drafted by the foundation's legal advisor Pek, who had previously opposed the deal, its core content remained highly similar to the original version: the agreement still allowed Web3Port to borrow 5% of the total MOVE tokens and sell for profit under certain mechanisms, although the method of fund allocation was adjusted.

The borrower's name in the new contract is Web3Port, signed by a director of Rentech.

Notably, domain records show that on the day the agreement was signed, the email address used by the director belonged to the newly registered domain web3portrentech.io.

Prior Agreements

According to three insiders, the relevant person in charge of the Movement Foundation was not aware that Web3Port had signed another agreement with "Movement" weeks prior when the agreement was formally signed on December 8.

On November 25, 2024, Rentech signed a market-making agreement with Web3Port (the name of Web3Port has been obscured in the document). In this agreement, Rentech was the lender, and Web3Port was the borrower, and Rentech was referred to as "Movement" in the document. CoinDesk obtained this contract, some of whose content has been redacted, and further obscured personal names for privacy.

This version of the agreement shows that Web3Port had already reached an agreement with "Movement," with terms highly similar to the initial market-making proposal that the Movement Foundation had previously rejected. In this contract, Rentech was listed as a representative of Movement.

The contract between Web3Port and Rentech allows the borrower to liquidate assets at a 50% profit. (Obtained by CoinDesk)

The structure of this agreement is similar to the contract from November 27, explicitly allowing market makers to liquidate when the MOVE token price reaches specific targets—this was one of the core clauses in the old agreement and a key issue that industry experts like Zaki Manian are particularly wary of.

"Shadow Co-Founder"

Insiders revealed that there are various speculations within Movement about who the behind-the-scenes orchestrator of the relationship with Rentech is. This collaboration ultimately led to the token dump incident in December last year and plunged Movement into a public relations storm.

According to Blockworks, this agreement was initially circulated internally by Rushi Manche. Manche was temporarily suspended last week for investigation.

In response to CoinDesk, Manche stated, "Throughout the market maker selection process, the MVMT Labs team trusted several advisors and members within the foundation team to provide input and assist in designing the transaction structure. Clearly, at least one foundation member represented both parties' interests in this transaction, which is an issue we are currently investigating in depth."

This incident has also raised questions about Sam Thapaliya's role. He is the founder of the crypto protocol Zebec and one of Manche and Scanlon's advisors.

Communications reviewed by CoinDesk show that Thapaliya was copied on emails sent by Web3Port to the "Movement team" and also appeared in other correspondence related to market-making arrangements alongside Rentech and Manche.

Web3Port copied Sam Thapaliya and Rushi Manche on emails sent to Rentech (Emails obtained by CoinDesk)

"One employee stated, "As far as I know, Sam is a close advisor to Rushi and can be considered a 'shadow third co-founder' to some extent. Rushi has kept this relationship low-key, and we usually only hear his name occasionally."

"We often find that decisions have already been made internally, only to be suddenly changed at the last minute," another employee said, "and whenever this happens, we know it's likely Sam's influence."

According to three attendees, Thapaliya appeared at Movement's office in San Francisco on the day the MOVE token was publicly launched.

Screenshots from Telegram reviewed by CoinDesk also show that Movement co-founder Scanlon had tasked Thapaliya with assisting in filtering the whitelist for the MOVE token airdrop—a strictly limited list of wallet addresses eligible for the community giveaway (this event had been postponed multiple times).

This arrangement further deepened some employees' impression that Thapaliya's influence within Movement far exceeds what the company publicly discloses.

Thapaliya told CoinDesk that he has known Rushi Manche and Cooper Scanlon since they were college students and later provided advice to Movement as an external consultant. He emphasized that he "does not have any shares in Movement Labs," "has not received any tokens from the Movement Foundation," and "does not have any decision-making power in either organization."

Who is Rentech?

Rentech is the core entity at the center of the token controversy, created by Galen Law-Kun, who is also Thapaliya's business partner. Law-Kun told CoinDesk that he established Rentech as a subsidiary of the Singapore-based financial services company Autonomy, aimed at connecting crypto projects with family offices in Asia.

In a statement responding to CoinDesk, Galen Law-Kun stated that YK Pek "assisted in establishing and served as general counsel for Autonomy SG, which is the parent or affiliated company of Rentech." He also claimed that although Pek initially opposed the preliminary agreement with Rentech internally, he "suggested establishing Rentech's structure to advance the project launch" and "participated in drafting the first version of the contract, which was nearly identical to the contract he later drafted and approved for the foundation."

However, CoinDesk's investigation has not found any evidence that Pek represented Autonomy in establishing Rentech or drafted that first version of the contract.

In response, Pek clearly stated, "I am not, nor have I ever been, the general counsel for Galen or any of his entities." He further explained that a corporate administrative services company he co-founded did provide company secretary services for over 150 entities in the Web3 space, including two companies under Law-Kun. However, both companies reported as "asset-less" in their 2025 annual reports, and neither is Rentech.

Pek stated that he "spent two hours" reviewing a consulting agreement signed by Law-Kun with a certain project in 2024; additionally, "he contacted me regarding FTX-related filing deadlines," and "in August, he forwarded a Docusign NDA, which I only glanced at and did not charge a fee for."

Pek summarized, "I completely do not understand why Galen claims I am his general counsel; this statement confuses and disturbs me." He added that in the email correspondence between Law-Kun and his company secretary service partner, the other party was actually represented by a private lawyer named "Hillington Group."

According to YK Pek, "The Movement Foundation (of which I am a part) and the two general counsels of Movement Labs were introduced to GS Legal through Rushi Manche and were referred to as legal representatives of Rentech."

In Galen Law-Kun's account, Pek was introduced to him as Autonomy's legal counsel for ten projects and "never disputed or corrected this statement." Law-Kun also claimed that introducing GS Legal was merely a formality requested by Movement.

Movement co-founder Scanlon stated in a Slack message to employees that the company has hired the external auditing firm Groom Lake to conduct a third-party independent investigation into the recent unusual market-making activities.

He wrote in the message, "In this incident, Movement is the victim."