The issues surrounding Movement Labs intensified this week as the web3 project found itself at the center of a growing scandal. At the heart of the controversy is a token-dumping incident that triggered a sharp sell-off in the project’s native MOVE token. This led to a staggering 22% drop in value within 24 hours. The decline, combined with pressure from the community, led to the suspension of Movement Labs co-founder Rushi Manche.
The unfolding crisis was set off when reports revealed that a market maker tied to Web3Port sold 66 million MOVE tokens, which account for approximately 5% of the total supply. Many analysts and investors have described this as a coordinated dumping maneuver. The abrupt offloading caused market chaos and eroded investor confidence. It led to a price crash that removed recent gains and destabilized the project.
Movement Labs Releases Statement
In an official statement posted on X, Movement Labs acknowledged the leadership crisis and attempted to reassure stakeholders that internal reforms were underway. They confirmed that Rushi Manche has been suspended from Movement Labs. Also, Groom Lake is still conducting a third-party review regarding organizational governance.
The fallout from the scandal caused panic in the crypto market. It prompted many exchanges and organizations to take action against the project immediately. For example, Coinbase announced it would suspend MOVE trading, a move that further undermined confidence in the project.
The decision followed an earlier ban by Binance, which had already prohibited Web3Port from its exchange. The ban on Web3Port was due to concerns over manipulation and a lack of transparency.
What Is the MOVE Community Saying?
Observers were quick to point out that the MOVE scandal indicates a wider issue in the web3 industry. Some of them pointed out a lack of proper governance and accountability mechanisms. While token launches and airdrops attract enormous attention, they are often followed by insufficient oversight. This enables insiders and affiliated entities to disregard market integrity or retail investor protection.
Now under intense scrutiny, Movement Labs and the Movement Network Foundation have initiated an internal probe and an external governance audit led by Groom Lake. These investigations will help reveal any deeper structural weaknesses in the project’s token distribution and organizational leadership.
The future of Movement Labs remains uncertain. Trust in the MOVE token has been severely shaken, and the road to recovery will likely require more than just public statements. It will require a reevaluation of governance architecture, transparent communication with stakeholders, and a proven commitment to restoring credibility.
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