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MOVE Token Crashes After Movement Labs Faces $50M Lawsuit Over Insider Allocation
By: crypto economy|2025/05/16 03:00:09
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TL;DRMovement Labs is back under scrutiny after leaked documents exposed secret deals that handed up to 10% of MOVE tokens to close advisors.Sam Thapaliya and Vinit Parekh secured millions in tokens and undisclosed contracts, triggering legal threats and deepening internal tensions.MOVE drops 8.2% following the scandal as the company scrambles to contain the fallout with a corporate restructuring.Movement Labs once again finds itself in the spotlight after internal documents revealed undisclosed agreements with trusted advisors.According to the memos, the startup promised up to 10% of its MOVE token supply to two individuals during the project’s early stages, without informing investors or the broader community. The disclosure worsens an internal crisis that has been unfolding since the company’s troubled market debut.Documents obtained by the press show that Sam Thapaliya and Vinit Parekh, both tied to Movement since 2023, received substantial token allocations and financial perks through memorandums of understanding. While Movement claims these agreements were exploratory and held no legal weight, Thapaliya now threatens to sue to claim 2.5% of the token supply, currently valued at over $50 million.Thapaliya, founder of Zebec Protocol, not only secured a significant portion of MOVE’s token supply but also took part in strategic decisions that shaped the company’s initial direction. Meanwhile, Vinit Parekh — an industry consultant and former Microsoft executive — landed a contract guaranteeing him $50,000 per $1 million raised in funding rounds, alongside a similar token allocation. Both deals contained clauses preventing termination without mutual consent, making any formal separation now legally complicated.MOVE Loses Recent Gains Amid Market RecoveryAccording to CoinMarketCap, the MOVE token dropped 8.2% over the past 24 hours, falling to $0.1987 per unit. Its market cap now stands at approximately $507 million, with a daily trading volume of around $77 million.This latest controversy comes just weeks after news broke of a deal between Movement and Web3Port, a Chinese market maker that dumped $38 million in tokens following MOVE’s launch. That incident triggered a price crash and account freezes on Binance. The fallout also fractured the relationship between founders Rushi Manche and Cooper Scanlon. Manche was dismissed this month, while Scanlon resigned as CEO but remains with the organization.The reputational damage is already visible. Coinbase announced it would suspend trading of the token, and the company was forced to set up a new entity, Move Industries, to oversee network development.
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