Crypto Controversy: Unpacking the $38M MOVE Token Dump and the Web3Port Connection
A significant controversy is engulfing the Movement Foundation, developers of the MOVE crypto token, following revelations about a deal with Web3Port that culminated in a $38 million token sell-off.
Documents brought to light recently detail an arrangement that saw millions of MOVE tokens dumped shortly after the asset’s debut on a major exchange. The Movement Foundation, which has ties to the Trump family’s World Liberty Financial (WLFI), is now facing scrutiny over what appears to be a pump-and-dump scenario.
Reports emerged on April 30 detailing how this agreement led to 66 million MOVE tokens being liquidated on the very day the digital asset was listed on Binance. This action triggered a significant price drop and subsequent trading restrictions by the exchange.
[@CoinDesk obtained the contracts and much more:]
Further investigation, citing internal Movement Foundation communications, revealed concerns raised internally about their market-making agreements. Co-founder Cooper Scanlon pointed out that a substantial portion of MOVE tokens (over 5%), designated for market maker Web3Port, were channeled through an obscure entity named Rentech.
Problematic Contract Terms Fueled $38 Million Sell-Off
Scanlon indicated the Foundation was misled into believing Rentech was a subsidiary of Web3Port. This setup concentrated an unusually large token supply with one party. Alarmingly, the contract structure seemed to encourage a rapid sell-off for profit.
The agreement permitted Rentech to liquidate its entire MOVE holdings if the token’s fully diluted value surpassed $5 billion. Upon reaching this threshold, Rentech could sell all tokens, retaining 50% of the profits and returning the other half to the Movement Foundation.
This exact scenario played out on December 9, coinciding with the Binance listing. Web3Port reportedly sold its 66 million MOVE tokens immediately, netting approximately $38 million at the time. The sell-off caused the token’s value to plummet. Today, those same 66 million tokens are valued at only around $15.7 million, illustrating the severe price decline.
The incident highlights the risks associated with large token allocations in market-making deals, particularly when contracts contain clauses that could incentivize rapid liquidation over ecosystem stability.
Connections between the involved parties and WLFI add another layer. WLFI itself acquired 3.42 million MOVE tokens for $1.5 million ($0.439 each) on January 28, an investment that has significantly decreased in value. Furthermore, Web3Port had previously invested $10 million into WLFI in January, intertwining the finances of these organizations.