Crypto exchange giant Binance has identified a market maker for Movement that allegedly dumped millions of MOVE tokens following its launch, freezing the entity's profits.

In a statement on Tuesday, Binance said the actor was associated with another market maker for GPS and SHELL it had offboarded on March 9 — forbidden from further activities on the platform due to misconduct.

Binance claimed that one day after MOVE was listed on Dec. 10, approximately 66 million MOVE tokens were sold by the market maker, with "little buy orders." The entity made a net profit of 38 million USDT before it too was expelled from Binance on March 18, the firm stated.

The crypto exchange said it had informed Movement Labs and Movement Foundation teams of the irregularities with their market maker and frozen the proceeds "for the purpose of compensating users."

Binance emphasized that all projects' authorized market makers on the platform must place orders for both bid and ask, ensure sufficient order size within the specified depth levels, maintain a healthy and stable spread for market activity and retain orders for a certain amount of time.

The MOVE token gained around 7% following Binance's announcement to $0.46, according to The Block's Movement Price page.

MOVE/USD price chart. Image: TheBlock/TradingView.

In a separate statement, Movement Network Foundation confirmed that Binance had informed it of an ongoing investigation into market-making activities involving MOVE on March 11. "Movement Network Foundation and Movement Labs had absolutely no knowledge that this was happening," it said. "We chose to work with this market maker as they had already supported projects in the Movement ecosystem."

Thanking Binance for its investigation, the foundation added that the entity had acted against the project's wishes, without consent, and was in breach of its agreement that required it to provide liquidity on both sides of the MOVE/USDT pair.

Once informed of the activity by Binance, Movement Network Foundation said it severed all relationships with the market maker, including its ecosystem partnerships, and reached out to other crypto exchanges to inform them of the investigation. It then collaborated with Binance to recover the funds and committed to using them to purchase back MOVE on the public markets.

All cash proceeds will be used by the Movement Network Foundation to establish the "Movement Strategic Reserve" — a 38 million USDT buyback program to "purchase MOVE for long-term use and to return the USDT liquidity to the Movement ecosystem."

The buyback program will occur over the next three months on Binance, with purchased MOVE tokens periodically transferred to the Movement Strategic Reserve's onchain wallet, the foundation said.

However, beyond the potential impact of the buyback and reserve on price, it is not immediately clear how the program directly compensates users impacted  — the stated purpose of Binance freezing the funds in the first place.

The Block reached out to the Movement Network Foundation and Movement Labs for further comment.

Movement expands the usage of the Move programming language beyond the well-known Aptos and Sui Layer 1 blockchains. Despite utilizing Ethereum for security, the network is not a Layer 2 chain and could be better described as a fast finality rollup or a sidechain, Movement Labs co-founder Rushi Manche said previously.

Move was originally developed at Meta by a team composed of people from Facebook’s now-defunct Diem stablecoin project.

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