Movement Labs and the Movement Network Foundation Launch Internal Investigation into Market Maker Misconduct

Movement Labs and the Movement Network Foundation have launched a formal internal investigation into market maker misconduct

Movement Labs and the Movement Network Foundation have launched a formal internal investigation into market maker misconduct surrounding their native token, MOVE.

The investigation, now underway with support from a third-party review, follows Binance’s recent decision to ban an unnamed market maker associated with MOVE.

As BeInCrypto reported, the Binance exchange discovered the market maker had quietly dumped 66 million MOVE tokens worth approximately $38 million following the token’s listing.

The fallout triggered a sharp sell-off, pushing MOVE’s price below $0.30, marking new lows for the token.

According to Blockworks, Movement Labs issued a company-wide Slack communication on Tuesday announcing the investigation.

“We are conducting an internal investigation stemming from recent events. In addition, the Movement Network Foundation has commissioned a third-party firm to conduct an audit and review to investigate this matter further. This is standard best practice to ensure full transparency and accountability,” a spokesperson was quoted as saying.

The spokesperson declined to comment further, adding that they will not speculate on potential outcomes or penalties.

The investigation also coincides with Movement co-founder Rushi Manche’s temporary leave of absence, which sources confirmed was announced during an internal all-hands meeting on Monday.

While Manche was notably absent from a recent company offsite in San Francisco, he has disputed reports of his departure.

“Very much still at Movement. Missed company offsite because I was in Asia for Web3Festival,” Manche said on X, formerly Twitter, in response to a question about his absence.

Manche also responded to speculation about his status on Slack, stating that he remains active and participates in weekly ecosystem calls. His Slack profile, which sources said was deactivated late last week, appeared to be reinstated by Monday evening.

Despite the confusion, co-founder Cooper Scanlon continues to lead operational matters, assuring employees and the community that operations are normal.

As the third-party investigation unfolds and MOVE’s price continues to bleed, Movement Labs faces a crossroads.

The investigation may help rebuild confidence, but questions remain about internal controls, liquidity partner vetting, and the future of the MOVE ecosystem.

Binance ban and Web3Port ties

It is worth noting that Binance did not disclose the name of the banned market maker. However, on-chain investigator ZachXBT pointed out possible ties to Web3Port. The firm had previously interacted with Movement Labs’ social media and community channels.

This case adds to a growing list of questionable practices involving market makers in crypto, raising concerns about insider privileges, token dumping, and undisclosed conflicts of interest.

As BeInCrypto previously analyzed, market makers have been a source of chaos in the crypto markets. The lack of transparency and regulatory oversight allows some market makers to exploit their roles, often at the expense of retail investors.

In addition to the MOVE incident, Binance recently banned other market makers over misconduct related to GPS and SHELL tokens. As it happened, one entity behind those abuses allegedly operated using shell companies, masking its involvement in multiple suspicious listings. This may indicate how widespread the issue is.