Movement’s Token-Dump Scandal

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Good Morning.

As Movement Labs reels from a token-dumping scandal that triggered suspensions, bans, and audits, the spotlight turns to how insider incentives and opaque deals can wreck trust in even the most promising projects

In Today's Email:

• What Matters: Movement’s Token-Dump Scandal 🔎 

• Founders Highlight: Tekin Salimi of dao5 👨 

• Deal Flow: MGX Finalizes $2B Binance Deal with USD1 💵 

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TOGETHER WITH

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WHAT MATTERS

Movement’s Token-Dump Scandal

State of play: Movement Labs is facing backlash after a $38M MOVE token dump, tied to a deal that gave middleman Rentech control of 66M $MOVE (over 5% of the supply). Movement claims it was misled into signing the agreement.

• Internal documents show Rentech appeared on both sides of the deal: once as a Web3Port subsidiary, and once as an agent of the Movement Foundation.

• Experts say this created incentives to artificially pump the token’s price and dump on retail investors.

• Movement’s legal counsel initially flagged the deal as “possibly the worst agreement” they’d ever seen, but it was eventually signed in a revised form.

Co-founder Rushi Manche is under investigation, along with unofficial adviser Sam Thapaliya, who employees say had hidden influence over the project. Movement Labs has suspended co-founder Rushi Manche following this scandal.

• Binance later banned the associated market-making account for misconduct.

• The Foundation is now auditing the matter and claims Movement is a victim of internal misrepresentation and poor oversight.

• The MOVE token dropped over 13% on the news, while the broader crypto market rose.

What’s next: Coinbase announced it will suspend trading of Movement’s MOVE token on May 15 following a review prompted by a CoinDesk investigation into alleged price manipulation.

For builders and investors: Even a technically strong project can implode if the incentive structures are misaligned or poorly managed.

BUILDER-INVESTOR HIGHLIGHT

Tekin Salimi of dao5

Intro: Tekin Salimi is the Founder of dao5, an experimental crypto investment fund that will later convert into a DAO.

Previous background: Tekin began his career as a corporate lawyer at Torys LLP, he then joined Polychain Capital in 2018 as a General Partner, where he spent over four years helping lead investments in blockchain projects.

The big idea: Tekin and dao5 core vision is to move beyond speculative hype and back real-world use cases that integrate blockchain into financial systems, public infrastructure, and state-level technologies.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Strategy Posts $4.2B Q1 Loss

State of play: Strategy (MSTR) reported a $4.2B Q1 loss due to Bitcoin’s price decline, including a $5.9B writedown on its BTC holdings.

• Despite this, the company is doubling down, launching a new $21B stock offering to buy more Bitcoin.

• It now holds 553,555 BTC worth about $53B, purchased at an average of $68,459 per coin.

• The firm also raised its long-term BTC Yield target to 25% and its BTC $ Gain target to $15B.

DEAL FLOWS

MGX Finalizes $2B Binance Dea with USD1

Deal flows slowed down this week - we saw $175M in deals 💼 

According to Zach Witkoff of WLFI, MGX will use USD1, a new stablecoin from Trump-affiliated World Liberty Financial, to finalize its $2B investment in Binance.

• The deal, announced at Token2049 in Dubai, marks MGX’s first move into crypto and gives it a minority stake in Binance.

• While the investment was initially said to involve stablecoins, USD1 has now been confirmed as the settlement asset.

• USD1 is backed by US dollar reserves and short-term Treasurys, and aims to compete with USDT and USDC.

Deal flows in the past week:

• Catalysis, $1.25M Pre-Seed Round

• WineFi, $2M Seed Round

• Gata, $4M Seed Round

• ZAR, $7M Seed Round

• MagicBlock, $7.5M Seed Round

• Terminal 3, $8M Seed Round

• Miden, $25M Seed Round

• Camp Network, $30M Series A Round

• Nous Research, $50M Series A Round

• Inco, $5M Strategic Round

• Yoake, $1.2M Private Round

• Unto Labs, $14.4M Unknown Round

• Theo, $20M Unknown Round

QUICK BITES

• Kraken revenue hits $472M in Q1.

• Sam Altman’s World launches in US.

• Coinbase to suspend trading for MOVE by May 15.

• Metaplanet issues $25M in bonds to buy more BTC.

• Tether CEO defends decision to skip MiCA registration for USDT.

• Movement suspends co-founder Rushi Manche following scandal.

• WLFI's USD1 to close Binance's record $2B investment from MGX.

• Tether says Treasury exposure neared $120B in Q1, posts $1B profit.

• Sky mulls proposal to replace MKR with SKY as sole governance token.

• Robinhood lists B2C2 and Wintermute as largest crypto market makers.

• Strategy reports Q1 earnings miss, raises 2025 'BTC $ Gain' target to $15B.

NOTEWORTHY READS

• Dankrad Feist’s read on EIP-7938.

• Austin Campbell’s read on interest bearing stablecoins.

• Zaheer’s read on how "copy investing" bleeds crypto's reputation.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.