Weekly Market Highlights Review: MOVE Crash and Underlying Manipulations in Web3, AI and PayFi Entering an Acceleration Phase

This week, the cryptocurrency market experienced a significant rise, with the Ethereum ecosystem and AI sector increasing by over 20%. Meanwhile, internal turmoil within the industry has resurfaced, as Movement faced a price crash due to market-making protocol issues, involving multiple parties in the operations, triggering a reflection on industry regulations. At the same time, the development of AI and payment finance sectors has accelerated, with a certain public chain promoting new standards, several trading platforms laying out payment ecosystems, and policy changes indicating that the cryptocurrency market is facing a new round of reshuffling and opportunities.

1. Movement event - Market-making protocol triggered crash

This week, as a certain trading platform suspended Movement trading and another trading platform postponed the MOVE token airdrop, Movement has once again become the focus of public opinion. The project previously raised over $40 million and was selected for a crypto investment portfolio supported by Trump.

The manipulation suspicion is the core of this incident, involving the market-making agreement between Rentech and the Movement Foundation, which is accused of incentivizing price manipulation. According to media reports, the contract between the Movement Foundation and Rentech assigns control of about half of the circulating MOVE tokens to Rentech and incentivizes Rentech to sell for profit after pushing the token valuation to $5 billion, resulting in 66 million tokens ( being sold for $38 million ) the day after listing, causing a sharp drop in the token price.

Interestingly, after the sell-off event occurred, the Movement Network Foundation announced that it would buy back 38 million USDT worth of MOVE on a certain trading platform over the next three months, in an attempt to stabilize community sentiment, but a few days later it deposited 17.15 million MOVE into another trading platform.

The Role of Rentech and Contract Disputes:

• Rentech is a company with almost no digital footprint, yet after the launch of MOVE, it sold 66 million tokens ( worth 38 million dollars ). Contracts disclosed by the media show that Rentech played dual roles as both a subsidiary of a certain company and an agent of the Movement Foundation in the transaction, suspected of self-dealing.
• The contract terms include an incentive mechanism: if the fully diluted valuation of MOVE (FDV) exceeds $5 billion, Rentech may liquidate the tokens and share the profits with the foundation on a 50:50 basis. Cryptocurrency experts criticize this clause as "encouraging artificial price inflation followed by sell-offs," posing a potential manipulation risk.
• Movement Foundation legal advisor YK Pek initially referred to the agreement as "the worst agreement", and the foundation's director Marc Piano also refused to sign. However, co-founder Rushi Manche pushed for a revised version of the agreement to be signed on December 8, 2024, which removed some controversial clauses but retained the core incentive structure, allowing a certain company to borrow 5% of the total supply of MOVE tokens and sell them in a certain way to make a profit.
• According to legal documents obtained from three individuals familiar with the negotiation situation and the media, Rentech claims to be a subsidiary of a certain company and has proposed to self-fund $60 million in collateral assets, a move that has somewhat impressed the foundation. It is worth noting that Rentech's domain name was registered on the day the agreement was signed, indicating the temporary and suspicious nature of the operation.

Previously, someone shared a disclosure article about a certain market maker, stating that:

The core figure of the market maker and his team have established a "brokerage pipeline to a certain trading platform", from Spark Digital Capital to the market maker, and then to Whisper.

Initially, Spark operated in the name of VC, relying on market outsourcing and FA business to allow VC to invest in projects while obtaining free tokens for themselves. After the industry became competitive in 21 and 22, project parties were no longer willing to give tokens for free, so they shifted to an incubator model, establishing this market maker to provide project packaging and VC connections in exchange for 1-3% of tokens.

However, relying solely on incubators cannot realize monetization, so they established the market maker Whisper, which, under the guise of market making, actually created a selling window for the free tokens they held. Ultimately, this system became a complete production line from packaging financing to exit, while retail investors on a certain trading platform became the final buyers.

What is even more shocking is that the market maker signed a similar agreement with Rentech as early as November 25, 2024, bypassing the foundation's review, and Rentech was labeled as the "Movement" representative in the document. This indicates that key arrangements had been informally established in advance, laying the groundwork for subsequent explosions.

Additionally, cryptocurrencies should generally have a lock-up period to prevent early sell-offs; however, in the Movement event, the market maker obtained tokens through the protocol and immediately sold them, becoming the central issue for external allegations of insider trading.

After the incident broke out, Movement Labs and the market maker Rentech, as well as related parties, co-founders, and founders, blamed each other for the responsibilities. Movement claims to have been misled by Rentech and the market maker, while Rentech insists that the agreement was permitted by Movement. Currently, the project has commissioned the auditing firm Groom Lake to investigate the unusual trading, and several executives and legal advisors are under scrutiny. The project's reputation and governance are facing serious challenges, and the price performance of MOVE afterwards does not look promising.

This incident has exposed for the first time in detail the lack of regulation of the market-making mechanism and the opaque legal framework, but what needs to be considered is that the movement event may only be the tip of the iceberg in this dark area. Theoretically, market makers are entrusted by project parties to provide liquidity for new tokens, maintaining price stability and market depth through buying and selling operations. However, in practice, if there is a lack of regulatory or transparent mechanisms, market makers may be abused as tools for manipulating the market and secretly transferring large amounts of tokens, harming the rights and interests of ordinary investors and undermining market fairness.

2. AI and Payment Finance

This week, a certain public blockchain officially promoted articles related to the MCP and the AI revolution. The main point of the articles is that this public blockchain hopes to provide developers with a standardized and secure AI integration framework through MCP and a series of AI support programs, aiming to promote AI innovation in the Web3 ecosystem, address blockchain data access and security challenges, and help build a "proxies" future.

The public chain will encourage developers to build AI+Web3 applications on this public chain through the AI Hacker Marathon (, Al Agent Solution ) to assist developers in creating, deploying, and monetizing AI agents (, and the MVB program ), an AI-focused incubator that provides funding, mentorship, and business support for AI projects ( to support AI in three parts. This tweet has received widespread attention.

In the previous highlights of the Hong Kong conference, we also discussed that AI has been a hot topic since GPT, not only with the traditional Web2 AI boom, but also in the Web3 world, where various AI memes and copycat coins that leverage AI concepts are emerging endlessly. This shows the important position of AI in mainstream narratives.

Especially in the past year of 2024, it was a breakthrough year for AI company financing. Nearly one-third of global venture capital flowed into companies related to artificial intelligence, making AI the leading financing field. Data shows that funding for AI-related companies exceeded $100 billion, an increase of over 80% compared to $55.6 billion in 2023. The financing amount for the AI industry in 2024 surpassed every year in the past decade, including the global financing peak year of 2021.

![Weekly Market Highlights Review: MOVE Crash and Underlying Manipulation in Web3, AI and PayFi Entering Acceleration Phase])https://img-cdn.gateio.im/webp-social/moments-6bb7abdf1c2237631f8e7bc5d94beccd.webp(

In the later stage of financing in the fourth quarter of 2024, it reached 61 billion USD, a sequential growth of over 70%, compared to 36 billion USD in the fourth quarter of 2023, which is a year-on-year increase. The biggest change in the fourth quarter compared to the same period last year is the increase of 1 billion USD in rounds. A significant amount of funding has been raised in multiple sectors including artificial intelligence, applied artificial intelligence, energy, semiconductors, banking, security, and aerospace.

Additionally, according to data from May 2024, AI startups have received higher VC funding in seed, Series A, and Series B rounds compared to non-AI startups.

![Weekly Market Highlights Review: MOVE Crash and Underlying Manipulation in Web3, AI and PayFi Entering Acceleration Phase])https://img-cdn.gateio.im/webp-social/moments-7452d187f7417ebc5298223862089b89.webp(

According to informed sources, the Trump administration plans to lift the artificial intelligence chip restrictions from the Biden era as part of a broader effort to revise semiconductor trade limitations, which have faced strong opposition from major tech companies and foreign governments. The policy categorizes countries into three categories to regulate the chip exports of companies like certain enterprises.

The United States dominates AI financing, accounting for 46.4% of the value of VC transactions in the U.S. in 2024, totaling approximately $97 billion, with nearly 4,000 transactions. Based on the development situation, the number of Web3 AI projects is expected to see explosive growth this year. While we will not discuss whether they will siphon off existing market liquidity for now, it is certain that they will undoubtedly bring new wealth opportunities and value creation space to the market.

![Weekly Market Highlights Review: MOVE Crash and Undercurrents of Web3 Manipulation, AI and PayFi Entering Acceleration Phase])https://img-cdn.gateio.im/webp-social/moments-03c441fd9667e730848ab776ca8cd574.webp(

Currently notable AI projects with upcoming tokens: 0G) raised $105 million (, Sentient) raised $85 million (

In the payment finance sector, a trading platform launched a payment service focused on stablecoin payments on April 28, initially supporting USDT and USDC, with plans to gradually integrate more stablecoins in the future. Another trading platform partnered with the Kingdom of Bhutan on May 7 to jointly launch the world's first national-level cryptocurrency travel payment system with its payment services and DK Bank. The moves by these two leading exchanges seem to confirm the potential of this round of the payment finance sector, especially in the context of regulatory compliance for stablecoins.

Previously, the deposit activity of Huma Finance recommended in the payment finance track was very popular and also topped the trending list on a certain platform. The team claims to issue tokens in Q2, and currently, if you want to participate, you can seize the last opportunity. The project has raised a total of $46.3 million in two rounds of financing, attracting investment from well-known American institutions such as Distributed Global, Circle Ventures, and the stablecoin USDC issuer ). Lily Liu, the chairman of the Solana Foundation, also participated in the investment.

( 3. Policy Regulation

1. [May 7] New Hampshire passed a strategic Bitcoin reserve bill, authorizing state treasury officials to purchase Bitcoin.

• On May 7, New Hampshire became the first state in the United States to pass a strategic Bitcoin ) BTC ### reserve law, authorizing state treasurers to purchase the world's largest digital asset directly or through exchange-traded products ( ETP ).
• The bill allows state finances to invest up to 5% of funds (, approximately $280 million to $770 million ), in precious metals and cryptocurrencies with a market capitalization exceeding $500 billion, currently only Bitcoin qualifies ( with a market cap of $1.88 trillion ). This move signifies the United States entering the realm of compliant cryptocurrency investments, indicating that more states may follow suit. It also requires the implementation of U.S. regulatory custody to ensure safety and transparency, with the bill taking effect 60 days later.
• It is worth noting that it is not only New Hampshire that is leading the way in the state's Bitcoin strategic reserve. The Bretton Woods System ( also originated in New Hampshire. From July 1 to 22, 1944, 730 representatives from 44 allied countries held the United Nations Monetary and Financial Conference ) at the Mount Washington Hotel in Bretton Woods, New Hampshire. This conference established the International Monetary Fund ( and the International Bank for Reconstruction and Development ), known as the World Bank (, and established a fixed exchange rate system based on the US dollar and gold, known as the Bretton Woods System. This system collapsed in 1971 due to the decoupling of the US dollar from gold.

![Weekly Market Highlights Review: MOVE Collapse and the Undercurrents of Web3 Manipulation, AI and PayFi Entering a Period of Acceleration])https://img-cdn.gateio.im/webp-social/moments-2d5b2a49efdb2a5b4fcf5f5a3604a564.webp(