Movement Labs draws scrutiny following Binance’s market maker investigation
Movement Labs is once again at the core of some criticism after it declined to name a market maker offboarded by Binance
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Crypto exchange giant Binance announced that it offboarded a market maker Tuesday, saying that it removed the unnamed entity in light of “misconduct” around the MOVE token.
The unnamed market maker sold 66 million MOVE tokens “with little buy orders” back on December 12, scoring a $38 million USDT profit before being offboarded by Binance on March 18.
In turn, Movement Labs said it plans to buy back $38 million worth of MOVE tokens.
Following Binance’s action today, Movement Labs and the Movement Network Foundation said they “had absolutely no knowledge that this was happening.”
“We chose to work with this market maker as they had already supported projects in the Movement ecosystem,” a press statement said.
Crypto sleuth ZachXBT said on X that an investor had told him that the market maker in question was Web3Port.
Binance and Web3Port did not respond to requests for comment from Blockworks. Movement Labs shared its original post about the incident and said it would not comment further.
The market maker, Binance said in the announcement, was tied to another market maker from a separate investigation into GoPlus Security and MyShell. Both were “offboarded” by the exchange.
An examination of Web3Port’s X account history shows prior engagement with posts from Movement Labs. In February, according to a sponsored post on Cointelegraph, the Web3Port Foundation sought to “deepen its strategic partnership” with an L2 on Movement.
According to its website, Web3Port Labs “provides comprehensive full-cycle acceleration and investment support for Web3 projects at all stages. With our primary market investment fund and secondary market liquidity fund, we facilitate the complete lifecycle of startups, including investment, financing, management and exit, through a one-stop Web3 accelerator platform.”
On Crypto Twitter, folks pointed out that Web3Port prominently displayed its exit strategies for the projects it supports and incubates.
Moonrock Capital’s Simon Dedic said, “the reality is that only a handful of market makers in crypto can actually be trusted.”
Meanwhile, Mike Dudas of 6th Man Ventures said it was “clear” that Web3Port wasn’t a real market maker.
Movement’s response — which was to offer “transparency” in its post about the situation, though it failed to name the market maker — revived criticisms of the project across Crypto Twitter.
The long-running discourse around Movement Labs began before its token launch late last year, with user @0xSisyphus sharing a screenshot of what was allegedly a MOVE key opinion leader document. In response, Movement’s Rushi Manche said that it came from a marketing agency the firm had “cut off” a year ago.
But other criticisms have surfaced, including potential ties to World Liberty Financial’s token swap deals, as previously reported by Blockworks. Movement, at the time, told Blockworks that it had not engaged with WLFI or purchased any tokens.
Others, like Eric Conor, pointed out the timing of WLFI buying MOVE, which happened right before a news headline about Elon Musk’s DOGE showing interest in Movement. However, Manche denied any insider trading allegations at the time.
Other allegations, such as angel investors knowing Movement Labs was a “pump and dump,” have propagated on Crypto Twitter. X account Fede Intern also publicly warned builders away from Movement Labs last month.
“The technology is not there in any way or form, and this comes from someone who loves the MoveVM created by Aptos and SuiNetwork. The idea behind Movement is good, but the execution and the token launch have been very strange, to say the least,” they wrote.
Movement elsewhere faces an $18.4 million lawsuit filed in December by the former head of financial relations at the IOTA Foundation, Daniel Simerman, who alleges breach of contract.
According to the complaint, co-founder Rushi Manche and Cooper Scanlon met with Simerman in April of 2023 to “discuss how to obtain funding for their business, how to optimize their product offering, how to manage and grow blockchain organizations at this scale, and the engagement of plaintiff’s services on a compensated basis.”
Movement declined to comment on the criticisms it faces after multiple attempts to reach the team.
Disclosure: Blockworks cofounder Jason Yanowitz is an angel investor in Movement Labs.
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