Katherine Ross

Crypto exchange giant Binance announced that it offboarded a market maker Tuesday, saying that it removed the unnamed entity in light of “misconduct” around the MOVE token.



The unnamed market maker <a href="https://www.binance.com/en/support/announcement/detail/478515187fab440fa80e56137c148a1b">sold 66 million</a> MOVE tokens “with little buy orders” back on December 12, scoring a $38 million USDT profit before being offboarded by Binance on March 18.&nbsp;



In turn, Movement Labs said it plans to buy back $38 million worth of MOVE tokens.&nbsp;



Following Binance’s action today, Movement Labs and the Movement Network Foundation said they “had absolutely no knowledge that this was happening.”



“We chose to work with this market maker as they had already supported projects in the Movement ecosystem,” a press statement said.&nbsp;



Crypto sleuth ZachXBT said on X that an investor had told him that the market maker in question was Web3Port.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Update an investor tells me it’s <a href="https://twitter.com/Web3Port_Labs?ref_src=twsrc%5Etfw">@Web3Port_Labs</a> so avoid doing business with them at all costs and check their recent reposts for other projects they are potentially working with.&mdash; ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1904499840089772445?ref_src=twsrc%5Etfw">March 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Binance and Web3Port did not respond to requests for comment from Blockworks. Movement Labs shared its original post about the incident and said it would not comment further.&nbsp;



The market maker, Binance said in the announcement, was <a href="https://www.binance.com/en/support/announcement/detail/4a5fa79a6c174db29c43122db732af1e">tied</a> to another market maker from a separate investigation into GoPlus Security and MyShell. Both were “offboarded” by the exchange.



An examination of Web3Port’s X account history shows prior engagement with posts from Movement Labs. In February, <a href="https://cointelegraph.com/press-releases/web3port-foundation-commits-100m-to-boost-liquidity-on-novastro-the-first-rwa-project-on-movement">according to a sponsored post</a> on Cointelegraph, the Web3Port Foundation sought to “deepen its strategic partnership” with an L2 on Movement.



According to its website, Web3Port Labs “provides comprehensive full-cycle acceleration and investment support for Web3 projects at all stages. With our primary market investment fund and secondary market liquidity fund, we facilitate the complete lifecycle of startups, including investment, financing, management and exit, through a one-stop Web3 accelerator platform.”



On Crypto Twitter, folks pointed out that Web3Port prominently displayed its exit strategies for the projects it supports and incubates.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">What happened was that the team dumped about $40 million worth of tokens on users, and the market maker (MM) took the blame. Such scammy team, should send it to 0&mdash; Molly (@bigmagicdao) <a href="https://twitter.com/bigmagicdao/status/1904497973779972595?ref_src=twsrc%5Etfw">March 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Moonrock Capital’s Simon Dedic said, “the reality is that only a handful of market makers in crypto can actually be trusted.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Update on the <a href="https://twitter.com/movementlabsxyz?ref_src=twsrc%5Etfw">@movementlabsxyz</a> situation: It looks like the main scapegoat in all of this is <a href="https://twitter.com/Web3Port_Labs?ref_src=twsrc%5Etfw">@Web3Port_Labs</a>, the market maker behind <a href="https://twitter.com/search?q=%24MOVE&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$MOVE</a>. Not surprising at all &#8211; just the first time a CEX is actually taking action and making it public. For years, I’ve been hearing horror… <a href="https://t.co/HYMGLn0y5G">pic.twitter.com/HYMGLn0y5G</a>&mdash; Simon (@sjdedic) <a href="https://twitter.com/sjdedic/status/1904526314456908039?ref_src=twsrc%5Etfw">March 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Meanwhile, Mike Dudas of 6th Man Ventures said it was “clear” that Web3Port wasn’t a real market maker.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">yes, pretty clear to anyone that this isn&#39;t an actual &quot;market maker&quot;<a href="https://t.co/FaZWmM0hs8">https://t.co/FaZWmM0hs8</a>&mdash; Mike Dudas (@mdudas) <a href="https://twitter.com/mdudas/status/1904498785775944117?ref_src=twsrc%5Etfw">March 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Movement’s response — which was to offer “transparency” in its post about the situation, though it failed to name the market maker — revived criticisms of the project across Crypto Twitter.



The long-running discourse around Movement Labs began before its token launch late last year, with user @0xSisyphus <a href="https://x.com/0xSisyphus/status/1864261624657301697">sharing a screenshot</a> of what was allegedly a MOVE key opinion leader document. In response, Movement’s Rushi Manche <a href="https://x.com/rushimanche/status/1864316507465110015">said</a> that it came from a marketing agency the firm had “cut off” a year ago.



But other criticisms have surfaced, including potential ties to World Liberty Financial’s token swap deals, as <a href="https://blockworks.co/news/trump-backed-project-token-swaps">previously reported by Blockworks</a>. Movement, at the time, told Blockworks that it had not engaged with WLFI or purchased any tokens.



Others, like Eric Conor, <a href="https://x.com/econoar/status/1884264978401878509/photo/2">pointed out</a> the timing of WLFI buying MOVE, which happened right before a <a href="https://x.com/tier10k/status/1884252132540571895">news headline</a> about Elon Musk’s DOGE showing interest in Movement. However, Manche <a href="https://x.com/Timccopeland/status/1884651848226750909">denied</a> any insider trading allegations at the time.



Other allegations, such as angel investors knowing Movement Labs was a “<a href="https://x.com/0xBalloonLover/status/1894466761300251027">pump and dump</a>,” have propagated on Crypto Twitter. X account Fede Intern also publicly warned builders away from Movement Labs last month.&nbsp;



“The technology is not there in any way or form, and this comes from someone who loves the MoveVM created by Aptos and SuiNetwork. The idea behind Movement is good, but the execution and the token launch have been very strange, to say the least,” they wrote.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">After sufficient analysis on our side, we can publicly say that we recommend any builder to stay as far away as possible from <a href="https://twitter.com/movementlabsxyz?ref_src=twsrc%5Etfw">@movementlabsxyz</a>. We have nothing personal against them; I only had a few interactions with the founder and liked him. We even have common friends who…&mdash; Fede’s intern 🥊 (@fede_intern) <a href="https://twitter.com/fede_intern/status/1894349781918437509?ref_src=twsrc%5Etfw">February 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Movement elsewhere faces an $18.4 million lawsuit filed in December by the former head of financial relations at the IOTA Foundation, Daniel Simerman, who alleges breach of contract.



According to the complaint, co-founder Rushi Manche and Cooper Scanlon met with Simerman in April of 2023 to “discuss how to obtain funding for their business, how to optimize their product offering, how to manage and grow blockchain organizations at this scale, and the engagement of plaintiff’s services on a compensated basis.”



Movement declined to comment on the criticisms it faces after multiple attempts to reach the team.&nbsp;



Disclosure: Blockworks cofounder <a href="mailto:jason@blockworks.co">Jason Yanowitz</a> is an angel investor in Movement Labs.



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Movement Labs draws scrutiny following Binance’s market maker investigation

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Yesterday, former Binance CEO Changpeng Zhao praised “USD1” and posted, “Welcome to BNB Chain!”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Welcome to <a href="https://twitter.com/BNBCHAIN?ref_src=twsrc%5Etfw">@BNBChain</a>! According to BSCScan, the smart contract was deployed 20 days ago. Build! 👏<a href="https://t.co/qr22y4pXqE">https://t.co/qr22y4pXqE</a> <a href="https://t.co/J0TvwEnUin">https://t.co/J0TvwEnUin</a>&mdash; CZ 🔶 BNB (@cz_binance) <a href="https://twitter.com/cz_binance/status/1904206000456077411?ref_src=twsrc%5Etfw">March 24, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



A couple of hours later, World Liberty Financial noted that USD1 is not “currently tradable,” and seemingly took ownership of the new stablecoin.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">USD1 is not currently tradable. Beware of scams and follow us here for all official announcements 🦅<a href="https://t.co/msnj0zLSp7">https://t.co/msnj0zLSp7</a>&mdash; WLFI (@worldlibertyfi) <a href="https://twitter.com/worldlibertyfi/status/1904231269111578790?ref_src=twsrc%5Etfw">March 24, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



And, after a lot of speculation and even more texts sent out from yours truly, we finally have some answers this morning. USD1 will be minted on Ethereum and Binance Smart Chain blockchains, though the team isn’t ruling out future protocols, per a press release.&nbsp;



“WLFI’s USD1 will be 100% backed by short-term US government treasuries, US dollar deposits, and other cash equivalents,” the release said.



BitGo will custody the USD1 reserves. In a statement, CEO Mike Belshe praised the stablecoin as an advancement in “institutional-ready digital assets.”



“USD1 provides what algorithmic and anonymous crypto projects cannot — access to the power of DeFi underpinned by the credibility and safeguards of the most respected names in traditional finance,” said Zach Witkoff, WLFI co-founder.



It’s still unclear from the press release what role Wintermute was playing, though it looked like it was potentially in the mix (per <a href="https://etherscan.io/token/0x8d0d000ee44948fc98c9b98a4fa4921476f08b0d?utm_source=empire-blockworks.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=oracle-insights">Etherscan</a>). No word back from the Wintermute team yet, either.



WLFI just closed $550 million in token sales last week and, in an accompanying press release, said: “Over the last six months, WLFI has established key relationships with leading blockchain protocols and institutions including Ondo Finance, Ethena, Chainlink, Sui and Aave. These relationships have positioned WLFI to more rapidly build and deploy its upcoming platform, which is being purpose-built to democratize finance for millions.”



But the project hasn’t been without its criticism, with our very own Jack Kubinec <a href="https://blockworks.co/news/trump-backed-project-token-swaps">reporting last month</a> that it was courting other teams for token swaps.&nbsp;



Now we’ll just have to see what’s next for WLFI. And the biggest question is: What players are involved?



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BitGo to custody reserves of World Liberty Financial’s USD1 

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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Here’s the thing about strategic reserves.



The name implies that whatever is in the reserve is a stockpile that can be utilized at some point in the future when the situation calls for it.



In the US, the government maintains a <a href="https://www.energy.gov/ceser/northeast-home-heating-oil-reserve">stockpile</a> of one million barrels of diesel fuel spread between Massachusetts, New Jersey and Connecticut — a trove of oil to be released to heat homes and businesses should there be a supply disruption somewhere down the line.&nbsp;



A strategic grain reserve does much the same thing, but for a critical food ingredient.



They do not necessarily have to directly benefit the general public, either. At one point, the government was also stockpiling helium, <a href="https://www.cfr.org/backgrounder/state-us-strategic-stockpiles">hoarding</a> it for use in military blimps, although these days the private sector handles that, and the helium instead is used for rockets and superconductors.



So what would a strategic crypto reserve actually be for? What future calamity could a portfolio of random coins help alleviate?



A bitcoin-only strategic reserve is the easiest to square. As far as coins go, it’s obviously the most resistant to major long-term corrections — it has always bounced back from its semi-regular 80% drawdowns.



BTC is also effectively uncorrelated with the rest of the crypto market — because it almost always leads it. That makes it the obvious choice for a strategic reserve.&nbsp;



After all, bitcoin’s primary modern use case is buying and holding long-term, which is about as close to an overarching goal for any strategic reserve as we’ve got right now. Maybe one day in the future, on some rainy day, the US could sell its bitcoin something, pay off some debt or otherwise fund initiatives for the common good.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcHjx1_-Z4PWn9T20BR3HIjnpjZWLRruCdnng5au0MQFGH1x4vEYuIOOiuvkBG2J9PfMPhW57RHCRpimfuLJYpAyXnlMQxiDrLBkUQh8DmoO3qcBKaXqcdhC12AAQfj7qjjB9B5UQ?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/></figure>



As it stands, the nearest things we have to a US strategic crypto reserve are the $20 billion BTC seized through criminal cases over the years — which is still on track to be liquidated at some point, although perhaps not in the short term.



Then, there’s the growing strategic reserve maintained by Trump’s upcoming DeFi project World Liberty Fi. It’s so far spent $303 million on seven different coins since the end of November, as recently as last week, with nearly two-thirds of it going to ETH.&nbsp;



Tracking the value of World Liberty Fi’s reserve is more difficult after it moved most of it into Coinbase Prime custody earlier this month. But after piecing together the onchain data, I calculated that the portfolio was worth just over $261 million earlier this morning.



That puts it in the red by about 14% on all of its purchases to date (as shown by the blue line on the chart above, while the other lines show the overall performance of each position).&nbsp;



TRX is the only hold still green, but only barely, with ENA the worst — World Liberty Fi is down around $2.7 million on its ENA positions right now. The portfolio is largely being held up by bitcoin, with it down around $30 million in its ETH compared to $5 million on BTC.



Perhaps there’s no reason for World Liberty Fi’s strategic reserve to exist at all, other than basic treasury management common to many crypto projects, not to mention the <a href="https://blockworks.co/news/trump-backed-project-token-swaps">reported token swap deals</a> relayed by Lightspeed’s Jack Kubinec.



But if it really turns out that World Liberty Fi’s crypto portfolio is in fact Trump’s <a href="https://blockworks.co/news/trump-strategic-crypto-reserve">anticipated strategic reserve</a>, then it will need to be actively managed, especially as we get closer to the next bear market.



If World Liberty Fi’s portfolio drops further, labeling it as “strategic” could get embarrassing.



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Why a US crypto strategic reserve would need active management

Jack Kubinec

World Liberty Financial, the crypto platform backed by President Donald Trump, has been courting blockchains to take part in “token swap” deals, two sources with knowledge of the matter told Blockworks.



Representatives for World Liberty Financial have been approaching blockchain teams with an offer: buy at least $10 million worth of unlaunched WLFI tokens with a 10 percent fee, and World Liberty Financial will buy the same amount of the blockchain’s native token.&nbsp;



A message from a World Liberty Financial representative shared with Blockworks said the WLFI tokens would be transferred at a $1.5 billion fully diluted valuation, which is crypto verbiage for the theoretical total value of a given crypto token.&nbsp;



The World Liberty Financial platform is expected to launch in Q3 of this year at a $1.5 billion FDV, the representative’s message said. The message insisted that none of the tokens could be subject to a vesting period, and the minimum buy in for a token swap partnership was set at $10 million.&nbsp;



A source at a second blockchain project, granted anonymity to discuss private business dealings, confirmed to Blockworks that they had received the same offer with the caveat that while $10 million was the minimum buy in, it would take $15 million to receive priority treatment from World Liberty Financial.



World Liberty Financial will aim to help users access third-party DeFi applications to do things like earn yield on stablecoins or borrow cryptoassets, according to the project’s official documentation. President Trump <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">began promoting</a> the project while still on the campaign trail last year.&nbsp;



Right now, the only thing users can do on World Liberty Financial’s website is buy the forthcoming WLFI token. According to the website, roughly 24 billion WLFI tokens have been sold at $0.05 apiece, which would total some $1.2 billion.&nbsp;



Chinese crypto entrepreneur Justin Sun <a href="https://x.com/justinsuntron/status/1881169556506546485">claimed</a> that TronDAO has snapped up $75 million.



Only President Trump’s son Eric, who is on the project’s “board of managers,” is directly involved with World Liberty Financial, but the Trump family has financial upside nonetheless.&nbsp;



An LLC affiliated with President Trump and his family is entitled to 60% of the project’s equity, 75% of the fee revenue generated by the WLFI token sale, and 22.5 billion WLFI tokens, worth some $1.1 billion at the public sale price.&nbsp;



World Liberty Financial’s crypto wallet is public. ETH accounts for about half of the project’s $378 million in crypto, data from Arkham <a href="https://intel.arkm.com/explorer/entity/worldlibertyfi">shows</a>. The rest of the holdings include Justin Sun-linked wrapped bitcoin, staked ether, and USDC, as well as a smattering of smaller tokens.&nbsp;



Scoring a spot on World Liberty Financial’s balance sheet has become a point of pride for crypto projects.



“[We] would like to thank @worldlibertyfi for their continued support and look forward to an [American] future for MOVE,” Movement Labs co-founder Rushi Manche wrote on X after World Liberty Financial acquired $2 million in its native token.



“Movement has not purchased any WLFI tokens or engaged with WLF,” a Movement Labs spokesperson told Blockworks.



The message shared with Blockworks says token swap candidates will participate in an initial meeting followed by a video meeting with World Liberty Financial co-founder Zak Folkman to finalize the deal.&nbsp;



Folkman and fellow World Liberty Financial co-founder Chase Herro previously built Dough Finance, a crypto platform that was hacked for $2 million in July 2024, CoinDesk previously <a href="https://www.coindesk.com/business/2024/09/03/inside-the-trump-crypto-project-linked-to-a-2m-defi-hack-and-former-pick-up-artist">reported</a>. The pair launched World Liberty Financial alongside real estate magnate and Trump associate Steve Witkoff.



Folkman, Herro and World Liberty Financial did not return direct messages sent to multiple social media accounts seeking comment.



World Liberty Financial’s token swap deal is currently running on a “first come first serve” basis, the message notes, although the Trump-backed platform is “prioritizing projects with the strongest technical metrics, mindshare, [and] willingness to do larger tickets than USD $10M.”



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Trump-backed World Liberty Financial courts crypto teams for token swaps

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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At face value, President Trump is well on his way to giving crypto what it wants.&nbsp;



A US government strategic crypto reserve. Or maybe it’s a <a href="https://www.cnbc.com/2025/01/23/trump-signs-executive-order-on-crypto-digital-asset-stockpile.html">stockpile</a>. Is there a difference?



Anyone interested in wading into that debate is well <a href="https://x.com/search?q=stockpile%20crypto&amp;src=typed_query">covered</a> on X and so on.&nbsp;



Same goes for those keen to moralize the implications of US government agencies accumulating coins other than bitcoin — perhaps even ones backed by funds and entities controlled by appointed officials like venture capitalist <a href="https://blockworks.co/news/trump-picks-crypto-czar">David Sacks</a>.



I’m taking a different path. Let’s put aside the US strategic stockpile. It doesn’t exist, yet.



What does verifiably exist onchain is the growing crypto portfolio of <a href="https://blockworks.co/news/world-liberty-financial-kyc-starts">World Liberty Fi</a>, the DeFi project endorsed by the Trump family.&nbsp;



And because this is crypto — and it&#8217;s on Ethereum — we know exactly what it’s doing at all times, and whether it’s underwater or not.



I touched on this <a href="https://blockworks.co/news/trump-strategic-crypto-reserve">earlier this week</a>, but World Liberty Fi has bought more crypto since Trump’s inauguration on Monday.&nbsp;



The chart below treats World Liberty Fi’s stockpile as a fund. Its performance is plotted by the blue line.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdU2hFDWlJ_IL64ZoIYeHIDpjpV6MviJskU6hom-nlRgGkxWvfOIOelF4mTSZcOShafjztA38OAuQuLPugSyGrz02X21vI8GVJLVKsUJvnC340tzO3hnX6ixGDU89MnjkddXOKB?key=r7UJwDSxvmuP7JeyAN-Z78QO" alt=""/><figcaption class="wp-element-caption">The crypto World Liberty Fi used to buy more coins came from its $300-million token <a href="https://dune.com/seoul/wlfi">sale</a>. It currently holds a combined ~$53 million in USDT and USDT.</figcaption></figure>



When the blue line goes into the red, World Liberty Fi’s accumulated portfolio is underwater. It’s otherwise ahead on its purchased crypto to date when it&#8217;s in the green area.&nbsp;



The portfolio is ahead by 4.3%, as of this morning, although there would be additional small gains related to liquid ETH staking which were not included in the analysis.



Most recently, World Liberty Fi spent $22.5 million on Thursday, on a mixture of ETH, TRX and wrapped BTC. That’s on top of the $2.65 million in TRX bought on Tuesday.



Those purchases brought World Liberty Fi total spend to $245.3 million across six different coins since it began at the end of November: the three above as well as LINK, ONDO, AAVE and ENA, a set which should integrate with the platform in some capacity in the future.



As you can see, the portfolio, now worth nearly $259 million, has spent about half the time ahead. That makes sense, considering it’s regularly accumulating crypto (although with no real stated goal for what it will be for as yet, other than for strategic purposes).



Sure, handwringing about how all this could go wrong is probably justified. Especially if World Liberty Fi’s portfolio indeed turns out to be Trump’s strategic crypto reserve.



It’s worth appreciating, however, that the very blockchain rails on which the stockpile exists make those concerns much easier to navigate. We can see what it’s doing. We can see when it buys, sells, stakes or otherwise transfers any of the coins it holds. And they will be forever trackable, at least within the current capabilities of analytics software.



The tools for everything to go right are there. We’ll just need to actually use them to make sure that it does.



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