The cryptocurrency startup funded by Donald Trump-backed World Liberty Financial, recently revealed in scandal news that it secretly allocated a significant portion of its mobile tokens to early-stage advisors.
The leaked internal documents raised serious questions about the balance of power within the company about these transactions, which were kept secret from investors.
Even before the tokens were launched, Movement Labs allocated a large portion of the moving supply to a small number of advisors, and it turns out that these contracts have not been disclosed to investors. Two separate business notes written by the company founder in 2023 reveal that a single advisor was provided with tokens worth around $2 million a year. The company claims that these contracts are non-binding and created for exploratory purposes, but the existence of the documents reveals confusion in the company’s internal mechanisms.
Following the development, co-founder Rushi Manche was fired from the company this month, and co-founder Cooper Scanlon resigned as CEO, but remained at the company. “When we founded the company, I was the CTO and led the engineering team. I left most of the business transactions to Cooper,” Manche said in a statement.
The names mentioned in the leaked documents include Zebec Protocol CEOs Sam Thapaliya and Vinit Parekh. Both men played an influential behind the scenes in the company’s early strategies. According to insiders, the two men had access to up to 10% of the total moving supply through a secret memorandum signed between them.
Thapaliya “lents” 5% of the mobile supply of market production and marketing activities, while another transaction allocated an additional 2.5%. The current value of this amount is over $50 million. The Movement Lab claims that these contracts are non-binding, but Tapariya denied the claim and said he would take legal action: “These contracts were never voided. I would legally assert my right to a 2.5% token.”
*This is not investment advice.
