The Internal Deal Leak at Movement Labs has exposed secret agreements to allocate 10% of MOVE tokens to advisors, sparking controversy. Revealed on May 15, 2025, these undisclosed deals, worth tens of millions, have deepened internal conflicts and eroded investor trust. This article examines the leaked agreements, their fallout, and the impact on Movement’s place in the modular blockchain ecosystem.
Secret Agreements Uncovered
The Internal Deal Leak surfaced through internal documents obtained by CoinDesk, showing Movement Labs promised 10% of MOVE tokens to advisors without informing investors or the community. Dated February 2023, the agreements include:
- Sam Thapaliya, CEO of Zebec Protocol and an unofficial advisor, was offered 5% of MOVE tokens for promotion and market-making, plus an additional 2.5%, totaling 7.5%—valued at over $50 million at current prices.
- Vinit Parekh, owner of Digital Incubation Group, was granted 2.5% of MOVE tokens and a $2 million annual fee, tied to 5% commission on funds raised by Movement.
These deals, structured as non-binding memoranda of understanding (MOUs), require mutual consent to cancel, raising potential legal risks. The lack of transparency has fueled accusations of unethical conduct.
Internal Strife and Market-Making Controversy
The Internal Deal Leak has intensified tensions between Movement’s co-founders, Rushi Manche and Cooper Scanlon. Manche, recently ousted, claims Scanlon authorized the advisor token deals early on and denies responsibility. However, Manche is implicated in a disputed market-making agreement with Web3Port, blamed for dumping $38 million in MOVE tokens, crashing prices and triggering Binance account freezes for some users.
The Web3Port deal, involving 5% of tokens, overlaps with Thapaliya’s allocation, suggesting potential conflicts of interest. However, Manche also played a role in a controversial market-making deal with Web3Port. This deal triggered a $38 million MOVE token sell-off. As a result, prices crashed and Binance froze several accounts. These overlapping roles have raised questions about governance and accountability.
Fallout and Market Impact
The Internal Deal Leak led Coinbase to delist MOVE tokens, causing a 50% price drop in a week, with tokens trading at $0.20, down 30% over the past month. This contrasts with a broader crypto market rally, where altcoins surged 30–100% after U.S. tariff delays and steady Federal Reserve rates. Movement’s woes highlight the critical role of transparency in maintaining community trust.
Read more: Binance Removes Movement MM Over Market Manipulation
To address the crisis, Movement announced a restructuring, forming Movement Industries under Scanlon’s leadership, though he stepped down as CEO. Online discussions reflect disillusionment, with many questioning the project’s viability in the competitive modular blockchain space. The scandal has tarnished Movement’s reputation as an emerging star in decentralized infrastructure.
Implications for the Crypto Ecosystem
7-day price movement of the MOVE token. Screenshot taken May 16, 2025, from CoinMarketCap.
The Internal Deal Leak underscores the risks of opaque governance in crypto projects. For Movement, rebuilding trust will require clear communication and accountability. The delisting and price crash may deter investors, while legal disputes over MOUs loom as a threat. The incident also highlights the need for stricter oversight in token allocations to prevent conflicts of interest.
For the modular blockchain sector, Movement’s misstep could shift momentum to rivals prioritizing transparency. As the crypto market thrives, projects like Movement must align with community expectations to survive. The fallout may prompt exchanges to tighten listing criteria, impacting future token launches.
Conclusion
The Internal Deal Leak at Movement Labs, exposing 10% MOVE token allocations to advisors, has triggered a crisis of trust. With Coinbase delisting, internal conflicts, and a 50% price drop, Movement faces an uphill battle in the modular blockchain arena. The scandal, tied to figures like Thapaliya and Web3Port, emphasizes the need for transparency in the crypto ecosystem. Movement’s next steps will determine its survival in a competitive market.