Coinbase Halts MOVE Trading: Can Movement Network Recover from Scandal?

On May 1, 2025, Coinbase, the leading U.S. cryptocurrency exchange, announced it would suspend trading of the Movement Network token (MOVE), effective May 15, 2025, citing failure to meet its listing standards.

This decision follows a turbulent period for Movement Labs, marked by a market-making scandal and a $38 million token dump that eroded investor confidence.

The MOVE token, native to the Movement layer-2 blockchain, plummeted over 20% to $0.18—its lowest since launch—before recovering slightly to $0.20. With a market cap now below $500 million, the suspension raises questions about MOVE’s future and its broader implications for the crypto market. Let’s unpack the details, explore the potential market impacts, and provide guidance for investors navigating this fallout.

The Suspension: What Happened and Why

Coinbase’s announcement, shared via X, stated that MOVE no longer meets its listing criteria, prompting a suspension across all platforms, including Coinbase Exchange, Coinbase Prime, and Simple and Advanced Trade. The exchange has shifted MOVE order books to limit-only mode, allowing users to place and cancel limit orders but restricting market orders. Trading will halt entirely on May 15 at 2:00 p.m. ET. While Coinbase didn’t explicitly cite a reason beyond routine listing reviews, the decision aligns with mounting controversies surrounding Movement Labs.

The trouble began in December 2024, when a market-making firm, Web3Port, allegedly dumped 66 million MOVE tokens shortly after the token’s exchange debut, pocketing $38 million in profits. This caused a sharp price collapse, with MOVE dropping from a peak of $0.70 earlier in 2025 to its current level of $0.20—a 73% decline from its all-time high. A CoinDesk investigation revealed that Rentech, a shadowy entity posing as a Web3Port subsidiary, brokered the deal and controlled over 5% of MOVE’s supply.

Contracts reportedly incentivized price manipulation, raising red flags about governance and transparency.

In response, Binance banned Web3Port in March 2025, freezing its profits, while the Movement Network Foundation severed ties with the firm and launched a third-party investigation led by Groom Lake, an independent cybersecurity firm. The foundation also established a $38 million USDT Movement Strategic Reserve to restore liquidity. Adding to the turmoil, Movement Labs co-founder Rushi Manche took a temporary leave in April amid allegations of insider trading linked to a $2 million MOVE purchase by World Liberty Financial. These events have cast a dark cloud over MOVE’s credibility, prompting Coinbase’s decisive action.

Movement Network is an ecosystem of Modular Move-Based Blockchains that enables developers to build secure, performant, and interoperable blockchain applications, bridging the gap between Move and EVM ecosystems. Movement Network is first Move-EVM L2 for Ethereum, alongside open-source tooling and protocols to facilitate the adoption of the Move programming language across blockchain ecosystems.

Market Impacts: Ripple Effects Across Crypto

The suspension of MOVE trading on Coinbase could reverberate through the crypto market, affecting investor sentiment, altcoin dynamics, and exchange policies. Here are the key impacts to consider:

• Erosion of Investor Confidence in MOVE
  The MOVE token’s 20% plunge following Coinbase’s announcement reflects a sharp loss of trust. Posts on X, such as those from @COIN360com and @ChainGPTAI, highlight a 14.5–22% price drop within 24 hours, with MOVE trading at $0.19–$0.20 and facing downside risk if support at $0.18 fails. The ongoing Groom Lake investigation and lack of transparency around Rentech’s role further dampen sentiment.
  • Impact: Retail investors may exit MOVE positions, exacerbating downward pressure. The token’s market cap, now $505.9 million, could shrink further, potentially pushing MOVE out of the top 100 altcoins.
• Broader Altcoin Market Volatility
  While Bitcoin traded near a 70-day high above $97,000 and the CoinDesk 20 Index rose 4.4% on May 1, MOVE’s collapse underscores the fragility of smaller altcoins. The scandal could fuel skepticism about layer-2 projects, especially those with untested governance models. X users like @marry_079 have called out “disgusting market manipulation,” signaling broader distrust in similar tokens.
  • Impact: Other layer-2 tokens, such as Arbitrum (ARB) or Optimism (OP), may face scrutiny, though established projects with stronger fundamentals are likely to weather the storm. Short-term volatility in altcoin trading pairs is possible.
• Stricter Exchange Listing Standards
  Coinbase’s move highlights its commitment to regulatory compliance and investor protection, especially amid heightened U.S. scrutiny of crypto markets. The exchange’s decision to suspend MOVE after Binance’s earlier Web3Port ban suggests a trend toward stricter oversight of token listings. This aligns with the SEC’s recent guidance on stablecoins and proposed legislation like the GENIUS Act.
  • Impact: Exchanges may tighten listing criteria, delisting tokens with governance or transparency issues. This could reduce speculative trading but improve market integrity, benefiting compliant projects.
• Liquidity and Trading Challenges
  Coinbase’s shift to limit-only mode restricts MOVE’s liquidity, making it harder for traders to execute orders at market prices. With trading halted on May 15, MOVE will rely on other exchanges like Binance, but reduced liquidity could widen bid-ask spreads and increase volatility. The Block reported a 20% price drop from $0.25 to $0.20 post-announcement, reflecting immediate market stress.
  • Impact: Traders may shift to alternative layer-2 tokens, boosting liquidity in competitors. MOVE’s trading volume, already down since January, could dwindle further, limiting its market relevance.
• Reputation Damage to Movement Labs
  The market-making scandal, co-founder suspension, and Coinbase delisting have severely damaged Movement Labs’ reputation. The project’s mainnet beta, launched in December 2024, aimed to compete with leading layer-2 solutions, but these setbacks could deter developers and institutional partners.
  • Impact: Movement Labs may struggle to attract ecosystem growth, potentially ceding ground to rivals like Polygon or zkSync. Long-term, rebuilding trust will require transparent investigation outcomes and robust governance reforms.

Risks and Challenges

The MOVE saga faces several hurdles:

• Ongoing Investigation: The Groom Lake audit’s findings, expected in mid-2025, will be critical. Evidence of deliberate manipulation could lead to legal action or further delistings.
• Regulatory Scrutiny: U.S. regulators may investigate Movement Labs for securities violations, especially given Rentech’s role and insider trading allegations.
• Investor Redemptions: Large holders (“whales”) may dump MOVE tokens, especially if support levels break, triggering a deeper price slide.
• Competitive Pressure: Layer-2 projects with stronger track records could capitalize on MOVE’s woes, diverting capital and developer interest.

What’s Next for Investors and Traders?

For crypto investors and traders, the MOVE suspension is a cautionary tale:

• Exit Strategies: If holding MOVE, consider setting stop-loss orders below $0.18 to limit losses. X posts from @zklegends suggest some investors are already “ditching” their bags.
• Diversification: Shift capital to more stable layer-2 tokens or blue-chip cryptocurrencies like Bitcoin and Ethereum, which are less exposed to governance scandals.
• Monitor Developments: Track the Groom Lake investigation and Movement Labs’ response. A transparent resolution could stabilize MOVE’s price, though recovery seems unlikely before May 15.
• Exchange Policies: Stay updated on Coinbase and Binance announcements, as further delistings or restrictions could impact MOVE’s liquidity on other platforms.
• Sentiment Analysis: X posts reflect bearish sentiment, with users like @AlvaApp noting a “sharp sell-off.” Use social media to gauge real-time trader reactions but verify with price data from CoinGecko or TradingView.

Coinbase’s suspension of MOVE trading is a significant blow to Movement Labs, amplifying concerns about market manipulation and governance failures. The token’s 20% price crash and ongoing investigation underscore the risks of investing in early-stage altcoins, particularly those with opaque market-making deals. While the broader crypto market remains resilient, with Bitcoin near $97,000 and institutional demand strong, MOVE’s woes could dampen enthusiasm for smaller layer-2 projects. For investors, caution and diversification are key as the Movement saga unfolds.

Will MOVE recover, or is this the end of its journey?