A scandal-plagued crypto startup, Movement Labs, has been found to have secretly promised significant portions of its token supply to early insiders through undisclosed agreements. The company, backed by Donald Trump's World Liberty Financial, committed large portions of its MOVE tokens to a handful of early advisers before its token launch, arrangements that were never disclosed to investors.
Internal documents obtained by CoinDesk show that Movement Labs leaned heavily on these advisers to establish a foothold in the crypto industry. Two business memos, which include a promise of nearly $2 million a year to a single adviser, highlight the company's reliance on these behind-the-scenes deals. Movement Labs has described the agreements as exploratory and non-binding, but their existence sheds new light on the company's chaotic inner workings.
The controversy surrounding the startup has sparked finger-pointing among its executives, particularly between co-founders Rushi Manche and Cooper Scanlon. Manche, who was terminated by Movement Labs, has pointed to Scanlon's role in approving the secret deals, while Scanlon has stepped back from his CEO position but remains with the company. The use of informal agreements to allocate tokens to insiders reflects a broader pattern in the crypto industry, where large sums can change hands without appearing in official fundraising disclosures.
The case of Movement Labs illustrates how crypto startups can make significant financial commitments behind closed doors, commitments that can shape the trajectory of a token ecosystem without the knowledge of the community or even some employees.