"Trump-Supported Movement Labs Faces Controversy Over Insider Allocated Tokens - CoinDesk"

# Movement Labs Engulfed in Legal and Internal Turmoil Over Token Allocations and Contested Agreements Movement Labs, a cryptocurrency startup backed by former U.S. President Donald Trump, is currently entangled in legal battles. Reports indicate that the company allocated up to 10% of its total token supply to "shadow advisers," causing significant internal turmoil. Internal documents obtained by *CoinDesk* reveal that Movement Labs entered non-binding memorandums of understanding (MOUs) with certain advisers during its early stage. These agreements promised advisory roles with annual compensation of $2 million and additional allocations of 2.5% to 5% of the total supply of Movement (MOVE) tokens. Now, some advisers are demanding token allocations valued at over $50 million and are threatening legal action. # Key Players in the Dispute The controversy involves key figures like Sam Thapaliya, CEO of Zebec Protocol, and blockchain consultant Vinit Parekh, both of whom were crucial in Movement Labs' early development. Alongside co-founders Cooper Scanlon and Rushi Manche, they contributed to strategy, funding, and marketing efforts. The disputed token allocations for these advisers reportedly reached up to 10% of MOVE tokens. Previously, Movement Labs faced allegations of market manipulation due to its dealings with the Chinese market maker Web3Port. Approximately $38 million worth of MOVE tokens were sold immediately after listing, triggering a price drop of over 50%. Notably, the volume of tokens earmarked for Web3Port paralleled the 5% allocation promised to Thapaliya under the disputed agreement. # Internal Discord and Leadership Changes Amid growing internal conflicts, co-founder Rushi Manche was terminated in May, while Cooper Scanlon stepped down from his CEO position but remains within the company. Manche claimed that Scanlon was the primary architect of the contested agreements. The MOUs explicitly require mutual agreement for termination, suggesting legal grounds for disputes. Parekh confirmed his involvement in marketing and hiring but denied receiving any financial compensation so far. # Broader Implications for the Crypto Industry *CoinDesk* highlighted that undisclosed agreements, similar to those in the Movement Labs case, are common in the cryptocurrency sector. Similar issues emerged in 2024 with the Eclipse Project, involving advance allocations and pre-information disclosures that raised investor concerns. Challenges for Movement Labs intensified when Coinbase suspended MOVE token trading on May 15, leading to a sharp decline in the token's value. In an effort to regain credibility, the company launched a new entity, Move Industries. However, the trust deficit among investors remains a critical challenge. Market observers suggest that Movement Labs' ongoing disputes underscore broader governance and transparency issues in the cryptocurrency space. As legal battles continue, the company's future and market reputation remain uncertain.