How a Buried Middleman Contract Let Web3Port Dump $38 Million in MOVE Tokens

Movement Labs entered 2025 on a high: $38 million raised for its layer-2 rollup, a public endorsement tied to Trump's World Liberty Financial, and a pending $100 million Series B that would have valued the company at $3 billion. The pitch was Ethereum scaling built on Facebook's abandoned Move programming language, marketed as safer, faster, and community-driven.

That narrative collapsed within a day of the MOVE token's exchange debut, when 66 million tokens hit the market and wallets connected to a single market maker walked away with roughly $38 million while retail holders absorbed the losses. Much of what is now known comes from reporting by Sam Kessler at CoinDesk, who reviewed internal contracts, Slack logs, and emails — an unusually well-documented paper trail for a token-dump scandal.

01A middleman with no footprint

At the center of the affair sits Rentech, an entity that CoinDesk's reporting describes as having essentially no online presence before it convinced the Movement Foundation to lend out roughly half of MOVE's circulating supply, which was then routed to the Chinese market maker Web3Port Labs.

Cooper Scanlon, one of Movement's co-founders, has said the foundation was "led to believe" that Rentech was simply a subsidiary of Web3Port. Internal Slack conversations show staff were themselves unsure who Rentech actually was — confusion that apparently didn't stop the foundation from signing over control of a large share of its token supply to the entity.

The agreement's most damaging clause let the market maker begin liquidating tokens once MOVE's fully diluted valuation crossed $5 billion, splitting the resulting profit 50-50 with the foundation. Crypto founder Zaki Manian, after reviewing the documents, summarized the design bluntly: the structure created "incentives basically to manipulate the price to over $5 billion fully diluted value and then dump on retail for shared profit."

Movement's own general counsel, YK Pek, had flagged an early draft as possibly the worst agreement he'd ever reviewed. Yet the version he subsequently redrafted himself still preserved the core mechanic: Web3Port retained the right to borrow 5% of MOVE's supply under a profit-sharing arrangement tied to token sales. Sure enough, within 24 hours of MOVE listing on exchanges, wallets linked to Web3Port dumped the 66 million tokens the contract had effectively incentivized them to sell — conduct Binance later labeled "misconduct" when it banned the market maker.

Adding another layer of confusion, CoinDesk's review of the documents found that Web3Port and "Movement" had already struck a separate agreement weeks before the December 8 contract that has drawn most of the attention. That earlier document shows Rentech representing Movement's own side of the deal — directly at odds with Scanlon's account that the foundation believed Rentech was Web3Port's subsidiary rather than its own counterparty.

02The people around the deal

Rushi Manche, one of Movement's co-founders, is described by four sources who spoke with CoinDesk as the person who circulated the Rentech contract internally and pushed for its approval, forwarding it via Telegram with instructions that it simply needed a signature. Manche was quietly placed on leave in mid-April and was formally suspended on May 2, a move Movement Labs said was made "in light of ongoing events and as the third-party review is still being conducted." In his own statement on April 30, Manche framed himself as blindsided, saying the team had trusted various advisers only to later learn that at least one of them had represented both sides of the market-making arrangement.

A second figure surfaces repeatedly in the internal record: Sam Thapaliya, founder of the Zebec protocol, described by insiders as a kind of shadow co-founder despite holding no formal title. Emails show he was copied on correspondence about the market-making deal, and one employee told CoinDesk that last-minute changes to plans were "probably coming from Sam."

Galen Law-Kun, identified as Rentech's founder, has pushed blame toward Movement's legal side, alleging that YK Pek previously helped establish and served as counsel for Autonomy SG — which Law-Kun describes as Rentech's parent or affiliate. Pek has rejected the characterization, calling it "confused and disturbing." Scanlon, for his part, told staff via Slack that Movement itself was a victim in the episode and commissioned an outside investigation from the auditing firm Groom Lake.

03Market fallout and the delayed airdrop

Following Binance's ban, Coinbase moved on May 2 to announce it would suspend MOVE trading on May 15, citing a failure to meet its listing standards and shifting the token's order books to limit-only mode. MOVE dropped another 20% on the news, and its market capitalization has since fallen to roughly $450 million, down from over $2.5 billion near the start of 2025.

In response, the Movement Network Foundation unveiled a "strategic reserve" of 38 million USDT — a figure that lines up with the amount extracted by Web3Port — earmarked to restore liquidity to the ecosystem.

Community members may have taken the hardest secondary hit through MoveDrop, the project's long-promised, community-first airdrop, which remains indefinitely postponed. Movement Labs' April 30 statement attributed the delay to "a significant sybil attack" alongside its ongoing review of the market-maker irregularities, telling followers: "We know you have been waiting for this. We know this is inexcusable" — while pledging to redirect tokens seized from sybil wallets into ecosystem rewards. Separately, one commentator raised the question of whether Movement's founders had themselves borrowed liquid tokens from the foundation to realize personal gains while outwardly appearing to remain locked and vested.

04What's left

The immediate damage is measured in dollars — roughly $38 million siphoned out through wallets tied to Web3Port, a token price down more than 80% from its peak, and two major exchanges cutting ties. But the longer-term cost may fall on the projects built on top of Movement's chain, which now face questions about the foundation's governance that have nothing to do with the underlying technology. A blockchain marketed on trust and community ownership is left explaining a deal structure that a veteran founder said was built to incentivize exactly the outcome that occurred.