Author: Yangz, Techub News

When you see a cockroach at home, there is actually a whole nest of cockroaches.

Following the ban on market makers involved in violations within the GoPlus Security and MyShell projects earlier this month, Binance issued another statement yesterday, stating that an investigation found a market maker associated with the Movement project linked to the aforementioned market makers and decided to freeze its related profits to compensate users. Binance stated that on December 10 of last year, the day after the MOVE token was launched, this market maker sold approximately 66 million MOVE tokens, and by March 18 of this year, before being delisted from the platform, the market maker's final profit reached 38 million USDT.

The news caused an uproar in the industry, and the Movement Foundation responded immediately, stating that it had severed all ties with the market maker and promised to use the 38 million USDT recovered from the market maker to repurchase MOVE on Binance. Additionally, it stated that the Movement Foundation and Movement Labs were "completely unaware" of the market maker's malicious actions.

Due to the enormous profit amount, the industry not only condemned this "termite" behavior but also immediately launched an investigation into this malicious market maker. Based on various information currently available on CT, the primary suspect for this market maker is Web3port, the same as the malicious market maker disclosed by the community in the GoPlus Security and MyShell projects. (CZ had previously retweeted a disclosure tweet about the market maker Web3Port).

Chen Jian shared that "after gathering information from multiple sources, it can be basically confirmed that the market makers recently investigated by Binance, Goplus, Myshell, and Movement are all the same Web3port." He also revealed that this market maker had previously inquired through intermediaries whether it could delete posts.

Zachxbt also stated that investors had revealed to him that the market maker was Web3port and suggested users check the recent tweets retweeted by this market maker to understand other projects they might be collaborating with.

Of course, some netizens have already shared projects handled by Web3port (as shown in the image below). According to Web3port's annual summary report for 2024, the Web3port Foundation invested in 46 projects last year, with a total investment amount of approximately 35 million dollars, covering multiple sectors such as Infra, DeFi, and AI. Web3Port Labs helped accelerate 78 projects last year and assisted 83 projects in financing, with a total financing amount reaching approximately 120 million dollars.

After basically locking in the suspect market maker as Web3port, netizens further dug into the background and "misdeeds" of this market maker.

Previous tweets disclosed by CZ about Web3Port showed that Web3Port was formerly known as Spark Digital Capital, with key figure May Liu (Piao Piao). Initially, Spark Digital Capital operated under the guise of a VC, but in reality relied on market outsourcing and FA business to get VC investments in projects while obtaining free tokens for itself. In 2021 and 2022, as the industry became competitive and project parties were unwilling to give away tokens for free, Spark Digital Capital shifted to an incubator model, establishing Web3Port, primarily providing project packaging and VC connection services, charging 1-3% of tokens. Since relying solely on the incubator model could not generate revenue, Spark Digital Capital also established the market maker Whisper, which, under the guise of market making, actually created a selling window for the free tokens in its possession.

@agintender stated that the rumor he heard was that "Web3port's predecessor was Icport, which previously focused on the Dfinity (ICP) ecosystem accelerator, and later changed its focus for some well-known reasons." In 2022, Web3port helped project parties obtain VC investments through a "bootcamp" model and participation in large ecosystem hackathons, then switched tracks according to market rhythms, ultimately helping projects go live. Additionally, he revealed that the Particle network, which Binance launched last night, was also incubated by Web3port in its early stages.

In addition to investigating the background of Web3port, netizens also discovered the glaring term "exit" in the introduction on the Web3port Labs official website, which stated, "Web3port Labs provides comprehensive full-cycle acceleration and investment support for Web3 projects at various stages. Through our primary market investment fund and secondary market liquidity fund, we utilize a one-stop Web3 accelerator platform to facilitate the entire lifecycle of startups, including investment, financing, management, and 'exit.'"

Additionally, @0xVeryBigOrange cited the experience of a friend's project as an example of Web3port's "eating style." He stated that in January of this year, Web3port's BD actively contacted the project and emphasized that they only wanted to be "active market makers," not "passive market makers." @0xVeryBigOrange explained, "The so-called 'active market maker' actually means using the project's tokens to drive the price down, then repurchasing at a low price and returning them to the project party. Their logic is that the tokens for market making must first drop!"

It should be noted that the above information regarding Web3port and its predecessor is currently only speculation. Setting aside this topic, many community users question the reasonableness of completely blaming the market maker, believing that this is actually a "collusion" between the project party and the market maker.

@0xcryptowizard bluntly stated that it is "illogical" for the market maker to directly earn 38 million dollars, "it must be a cover for the Move team to offload." Meanwhile, @cryptobraveHQ stated, "From the information I obtained from four parties (exchanges, actual market makers, scapegoat market makers, and multiple project parties), a certain Port market maker is indeed taking the blame." He stated that market makers are the top predators in the industry, standing at the top of the pyramid, making money very easily. Web3Port entered the market maker space last year, taking a slice of the cake, and was targeted by other market makers, "exchanges and project parties also need to take the blame."

Furthermore, Zachxbt stated that Movement's statement "if it is to improve transparency, why not disclose the name of the market maker?" @nosleepjon also believed that Movement's response was "too weak, with many unresolved issues." He stated that the profit amount of 38 million dollars has not been confirmed, "if the amount is higher, and all parties have already distributed dividends, how should it be handled?" Additionally, he mentioned, "Tokens are sold at high prices but repurchased at low prices, which is actually free arbitrage for the foundation, rather than helping holders." Of course, he also pointed out the connection between Web3port and Spark Digital, questioning why they chose a notoriously "VC" scammer as a market maker.

Meanwhile, a screenshot of a social media post shared by @YunkaizZ revealed the connection between Movement and Dovey Wan, founding partner of Primitive Ventures. The institution had previously shared in an article last December that "the Primitive Ventures team initially decided to abandon investment in Movement in 2023, but this decision was ultimately overturned by Dovey Wan, prompting the team to re-evaluate the plan." Given Dovey Wan's reputation in the circle, many users began to question the potential hidden truths behind this investment.

When you see a cockroach at home, there is actually a whole nest of cockroaches. The current question is, how many unsavory trades are still hidden under the table in the industry? Perhaps there is not a small amount of capital settled in the circle, but if this predatory business continues to exist, who would dare to invest in altcoins? How can a comprehensive altcoin bull market be initiated and sustained?

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