Unchained - How MOVE’s Contracts Put a Pump and Dump Into a Legal Agreement - Ep. 828

Episode Date: May 2, 2025

The MOVE token collapse sparked one of the most damning investigations in the industry this year. In this episode of Unchained, investigative journalist Sam Kessler joins Laura Shin to walk through the contracts, questionable market-making deals, and finger pointing inside Movement Labs. From Binance’s ban to a Trump-affiliated crypto deal, this story unearths how the MOVE token collapse was the product of what looks like a pump-and-dump plan written out in legal contracts. Plus: How insiders structured deals to profit from artificial price spikes How this could have happened with a project backed by some of crypto’s most reputable VCs What this saga says about token launches, regulation, and market integrity And whether Movement Labs can (or should) be trusted to investigate itself Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com FalconX Bitkey: Use code UNCHAINED for 20% off Mantle Sam Kessler, Deputy Managing Editor for Tech and Protocols at CoinDesk CoinDesk: Inside Movement’s Token-Dump Scandal: Secret Contracts, Shadow Advisers and Hidden Middlemen Trading for MOVE will be suspended on Coinbase Timestamps: 👋 0:00 Introduction 🕵️‍♀️ 1:52 Initial details of the scandal ⚖️ 6:20 Conflicts of interest at Movement Labs and who knew what 💥 8:42 Why 5% of tokens = 50% of supply and why that’s wild 🧾 13:14 How a lawyer called the deal “the worst agreement I’ve ever seen” 🚫 18:41 Why Binance banned Web3Port after suspicious trading 🧩 20:38 The web of key players: founders, shadow advisors, and middlemen 🧠 25:51 A theory on treasury selling and token price manipulation 🔍 27:49 Can Movement Labs investigate itself, and will anyone trust the outcome? 📉 29:39 Why Coinbase is suspending MOVE and what that signals 🇺🇸 30:47 How Trump’s crypto arm is tangled up in the MOVE ecosystem 📰34:15 News Recap Learn more about your ad choices. Visit megaphone.fm/adchoices

Insane, insane. Everybody I spoke to was amazed because you get rumors about this sort of a thing happening. But to my knowledge, this is the first time I've seen it, you know, actually written out on a contract, you know, for the public to see that it's not just that people are like shadily, you know, selling tokens behind the scenes. They're making deals. Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Every episode we feature listener comments. Today we have some responding to my recent interview with Jeff Park and Mark Palmer on the launch of 21 Capital. On YouTube, 914 says, quote,

It's going up forever, Laura. And on X, Helicon Darkstar writes Ponziomics 101. If you want to hear your comment on a future episode, write a review of the podcast overall or leave a comment on our video on YouTube, Farcaster, or X. This is the May 2nd, 2025 episode of Unchained. Bitkey is the Bitcoin wallet from the team behind Square and Cash app. It's the first two of three multi-sick hardware wallet with recovery tools that replace the need for a seed phrase. Get 20% off with code unchained.

Powered by successful products like Mantle Network and M-Eath Protocol, Mantle is driving the next phase of on-chain finance by supporting ecosystem products, such as the Mantle Index 4 or MI4 Fund, and mental banking, which brings real world access, yield, and utility to digital assets. Today's an AI that speaks crypto and does the work of a team of analysts. Introducing Focal by Falcon X, bringing clarity to a world of noise. Visit askfocal.com. Today's guest is Sam Kessler, Deputy Managing Editor for Tech and Protocols at CoinDesk.

Welcome, Sam. Thanks for having me, Laura. Could I be back? You published a Blockbuster story on Wednesday, revealing, some of the contracts behind the controversial move token launch, which resulted in Binance banning the market maker, and now there's an investigation at Movement Labs. And also, now we've already had a real world impact from your article, which we can discuss, which is Coinbase delisting the token. But let's just dive into what happened at this scandal at a high level. Why don't you tell us what you uncovered? Yeah. So it does come at a crazy time. So Coinbase did just

It sounds like they're suspending it starting on May 15th. I don't know what the difference is between suspending and delisting. That's something that I'm going to have to report on and figure out. It just happened right before we started this podcast. But anyway, the TLDR of it, which you kind of started to cover, is that through this investigation that we published yesterday, I found a few contracts that show that the movement foundation, which is the entity that kind of is responsible for the move token attached to that movement project, they entered into a market-making agreement with a Chinese market-making

firm called Web3Port, where, you know, the long of the short of it or the short of the long of it is that essentially this agreement, according to experts that we spoke to, incentivize what essentially looked like is pumping and dumping of tokens, where insiders in the project, before a big air drop, before the circulation was really high, would have been able to essentially cash out of their tokens early for a quick profit. Yeah, so let's dive into the details because there's a lot to unpack. Maybe why don't we just start with the two key players probably at the center of the drama, which are these entities, WebFreeport and Rentek, unclear to me from some of what you wrote,

whether or not they're really separate entities. But anyway, explain how they got introduced into the picture, who they are, and what the relationship is between them. Yeah, so at the center of the story is this question of who is this Rentech entity. So I purposefully didn't go into it with the summary because it gets complicated. It's still complicated. There's an investigation apparently within movement into what happened here. But essentially, Movement says that it was deceived into making this market maker deal.

There's a couple of contracts that ultimately got signed. This is the best way, I think, to explain it. Movement signed a market-making contract. And market-making is just kind of a normal thing in crypto and even with stocks where you kind of pay, specialized financial firms to support the market for a token where they buy and sell at a normal market rate, typically not to make a profit for themselves, but just to kind of keep liquidity up. But essentially, they entered into this agreement with what they thought was Web3Port, which is a Chinese market maker. And even the contract that we published, it says Web3Port.

But in reality, it's signed by this entity Rentek, which was representing itself in a previous draft contract and in the signing of this contract, according to sources that I spoke to, it represented itself as a subsidiary of Web3Port. But now, apparently, movement is investigating whether that is indeed the case. And what that resulted in, the reason why this investigation is happening is because we actually have two contracts. We have the market-making contract that movement signed where they lent out 5% of their supply to what they thought was Web3, report, which is, You know, 5% doesn't sound like a big number, but in terms of how many tokens are circulating to movement's community, it was actually 50% of all tokens. We can talk about why that's important.

But anyway, crazy. But there was another agreement that was already signed that predated the December 8th agreement that we've been talking about, where Rentech in this contract has entered into a separate agreement with Web Freeport. So you have Rentech entering into an agreement with Rep3Port, in which case in this contract, WrenTech said that it was movement. It literally shows up RENTEC and quotations movement. But then separately, they have a contract where the same people who said they were movement in this contract are now Web3Port. They're signing as if they're Web3Port and movements on the other side of the deal.

So you have this entity in the middle where they could, I guess, dictate terms to both sides. And that's what this investigation is into. But there's reasons. Yeah, it's complicated. And one other piece of this is that they were actually also doing one deal with movement labs and then another deal with the Movement Foundation. And those two entities did not know about the other contract. It's a little, it's complicated.

And it's even, I tried to simplify it in my story. And so if anything's confusing, that's, that's, that's, that's, that's, That's our fault. But what really happened was there was this contract with the foundation. It was always with the foundation. The foundation nominally is, you know, separate from the Movement Labs Development Corp. This is a normal way that crypto companies operate to kind of avoid securities regulations where they have a labs entity to develop the tech and a foundation that's ostensibly separate

to have managed the token. All of the contracts that we're talking about did concern the Movement Foundation in theory on the movement side. But what's confusing and kind of complicating to this entire narrative is that we've released emails and texts, you know, and have some, you know, on background conversations that show that Rushi, who is the co-founder of movement and works at Movement Labs, again, separate from the token holding foundation, he is really engaged in discussions and circulated the initial contract for the market making. So he basically was a part of the foundation's dealmaking, which is a, it's a complicated thing. I keep on saying that word, but you do have a lot of people, you know, a lot of conflicts of interests. Yeah.

And so in a way, it's like your article kind of pointed out that there's a lot of messiness when there should be clarity or at least that's like ideally what you would have in this type of situation where you're right. Like in order to avoid triggering securities laws, it needs to be set up. a certain way. And the fact that this is actually hard to pull apart, I think shows that either they weren't trying to abide by those rules or surprisingly despite the very, you know, crypto-savvy investors they have, which include polychain capital, coin fund, a subsidiary of Revan Howard, placeholder, hack VC, robot ventures. Like, these are all like very crypto-native

places. And so for them to somehow be unclear on like what the best practices are, that there is something, you know, at least, at least eyebrow raising there. But let's now dig in, because you mentioned a little bit about this, but let's dig into what, you know, was unusual about these agreements, you know, around like the amount of tokens, like, you know, you mentioned that they, the market maker was going to be able to control 50% of the circulating supply. So explain, like, what is unusual about that arrangement? Yeah. So just to take a step back for a moment, you obviously have a crypto-native audience, but I think it's helpful to explain just two concepts

that kind of were undermined potentially by these agreements. The first thing is that just like a Web 2 startup where you grant stocks to your employees, there's a kind of vesting process or a lockup process where when you grant tokens as a crypto project to your employees and to your founders and to other insiders, there's always a lockup period where it takes a year, two years, three or sometimes four years gradually for your tokens to unlock. The idea here is to

keep up market confidence and make it such that, you know, one person, a founder, say, or a CEO or an employee can't just go right to the market and dump on retail investors and, you know, dump the price for those consumers. But anyway, that's something that was undermined here and we'll talk about why. The second thing is that there are lots of laws and we, I don't feel comfortable getting into what they are because I'm not a lawyer, but there are lots of laws around how markets are supposed to work, how financial markets are supposed to work, specifically around market manipulation and whether financial entities should or how they should manage things like market making so as not to artificially pump or deflate the price of an asset. You're not supposed to be

controlling that. That's left up to the market. Both of those things were undermined here. and the key provision in one of the contracts, the contract that was signed by Web Freeport, that led to this, is that there's this provision, there's this feature of the contract that says, hey, we're going to lend you 5% of our tokens, which as I mentioned is a huge percent of their overall circulating supply. We're going to lend you 5% of our tokens above industry norms, unusual.

But not only are we going to lend you these tokens for the sake of market making, but you're allowed to liquidate these tokens, which is unusual, under even more unusual, a certain rule. And that rule is that if the overall value of these tokens reaches a price such that the fully diluted value, the FDV of all moved tokens, reaches $5 billion, which is a high number, it's larger than what move raised at and sold some tokens at. If the token reaches that price, then you, Web3Port, the market maker, are allowed to sell those tokens for a 50-50 split, where you give us the lender in this case,

rent-tech or movement, it's complicated, and the other 50% goes to Webpre-Port. So experts, like I've talked to Zaki Manian, who's a, I call him a veteran crypto founder in the space. He's seen a lot of these sorts of deals and other people that I spoke to. You tell me this is very clear. It incentivizes price manipulation in their view,

market manipulation, where there's an incentive to pump up the price of the token, so that early insiders can dump those tokens at this really favorable price range for a 50-50 profit split. Sorry, that was a mouthful, but it's complicated, as I keep on saying. Yeah, no, but that's exactly why I think this made waves is because, you know, this notion of, like, a pump and dump or a rugpole. Like, these are things that the crypto community is so allergic to. And so to see that they're actually writing it into a contract, like these guys are really, there is something.

Insane. Insane. Everybody I spoke to was amazed because you get rumors about this sort of a thing happening. But to my knowledge, this is the first time I've seen it, you know, actually written out on a contract, you know, for the public to see that it's not just that people are like shadily, you know, selling tokens behind the scenes. they're making deals. Yeah, they're not putting it into like a disappearing message on signal. No. They're like signing a legal agreement.

Yeah, or selling tokens and then laundering on Monaro. It's so much, yeah, more. Anyway, it's interesting. So I find it also interesting how this even happened because what's so fascinating in your story is that actually the first time that one of the lawyers saw this contract, it's YKPEC. a.k.a. Wasi lawyer who's been on the show multiple times with their avatar, which is actually pretty fun to interview. But anyway, he described the initial Rentech contract to the Movement

Foundation as, quote, possibly the worst agreement I have ever seen. The Foundation's director replied, there are no circumstances in which I'm signing this. So, like, how do you think they got to a place where eventually they did sign something with Rentech? This gets to, one of the main themes of the story. If people spend all the time reading it, thank you for reading it. It is long, but there's a lot of finger pointing going on, and it's hard to know who actually was behind this agreement. But essentially, you have people within the foundation, most notably YKPEC, who, Wasey lawyer, we'll just call him Wasey lawyer, who Wassie lawyer, when he first saw this contract, apparently sent to the movement ecosystem, to the foundations and labs, through Rushi.

I'm the co-founder. When he first saw this, he sent out a memo. I tweeted out the memo, and we have an email in the story where he says, this is, like you said, possibly the worst agreement I've ever seen. Commercially, it makes no sense. You have the director of the foundation saying, I'm never going to sign this in any universe. And yet they sign a deal. The deal that ultimately got signed, and this gets to kind of the heart of something that I'm still kind of trying to unravel here, the deal looked different. They got rid of certain provisions where, you know, it was negotiated in part by people like WOSI lawyer, the general counsel for the foundation. But the provisions they got rid of were some of the really striking

ones where, for example, there is a provision that said, hey, if movement doesn't list a token on this, or the move token doesn't get listed on XYZ exchange, then the, you know, the person on the other side of this contract, the draft contract, RenTech, in this case, is allowed to sue movement for damages, which is just a crazy thing, because you're not even supposed to have power as a project to get your tokens listed. So that's one thing. There's a lot of other provisions that were removed, but there are still similarities between the contract that got signed and the one that was initially proposed and the one that Web3 port ultimately signed. And the contract that movement signed did still ultimately give the right for Web3 port to get 5% of its tokens and then

do with it, you know, what it ultimately did, which we'll talk about later. But They did sign the contract, and that's where it gets a little confusing. But the last thing I should stay here is that a foundation and a lawyer, they're not necessarily responsible. You'll hear for kind of negotiating the commercial terms of an agreement. They just want to make sure it is legal. And I guess they decided it was legal and signed the agreement that way. But there's still always a chance that the agreement itself had features that allowed for

what ultimately we saw. And it's hard to know whose fault that. ultimately is. And there's tons of finger pointing in this piece around how this, how this happened. Okay. Yeah. And one other thing I do want to point out is that when they sign this contract, the Rentec director's email address was Web3Port Rentec.io. And that domain was registered on the same day that the contract was signed, which is also interesting. It is. So in a moment, we will talk about what happened next. But first, a quick word from the sponsors to make this show possible. BitKee is the only Bitcoin wallet on Time magazine's best inventions list of 2024.

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So then we had the scandalous listing of the move token on Binance, which resulted in, I think it was web report getting banned. So tell us, people probably have heard about that, but just for, you know, continuity, explain that part of the of the story. Yeah, so most people, you know, started hearing about Web3Port with this incident. CoinDesk, I think this article is the first to really confirm that Web3Port, you know, was the entity involved here. But essentially, finance and a rare move announces on Twitter and on their, you know, on their like little news page on their website, they're like, hey, the crypto chain says, we banned a market maker, actually two, weeks prior to what we're going to talk about connected to two cryptocurrencies called My Shell and

GPS for market abnormalities. I forget the wording. And then a couple of weeks later, they ban another market maker. This time they say it's connected to the first market maker, and this time it's because of abnormalities with the move token. So through our reporting, we're able to confirm that that was Web Freeport or at least a wallet nominally, you know, in the hands or controlled by Web3. Port. And what Finance banned it for was the day after the move token was listed, this wallet that got banned, this market maker sold off 66 million tokens to the market for a $38 million profit without any buy orders, corresponding buy orders. So the ideas a market maker should be buying and selling to just support the market,

not on one side or the other, but they just dumped 66 million tokens. This was on December 10th. And then months later, you know, you get this finance ban where they're like, hey, we found these abnormalities. This is in March of this year. And we're banning this entity. And then, you know, I'm looking at my calendar two months later, I guess like now, this is coming out where people are pointing fingers and movements investigating. And it's hard to know whether this would have come out if not for the finance ban. Oh, wow. Okay.

Okay. So I guess like one other piece now we probably need to look into is like because, you know, there is this investigation. There are fingers being pointed. So let's talk about the different characters that are involved. We already did mention Brushi Manche, one of the movement labs co-founders. There's another co-founder, Cooper Scanlon. And there's a controversial figure, Sam Tapalia. Tapalia.

Tapalia. So yeah. So go ahead and explain who all of this. a few figures. So Sam and Rushi are, or I'm sorry, Rushi and Cooper are the co-founders of Movement, Movement Labs, the ecosystem. Rushi is the one who comes up the most in this story as the person who first circulated the deal internally. We have a telegram message showing him forwarding it to the team, which is weird, as I mentioned, because he's on labs, not on the foundation, which is the people responsible for the token. But anyway, Rushi's a character

in this story. He's also C-Ced on emails. Also C-Ced on the emails is this guy named Sam Tappalea. Sam Tapalea is a person who, by his own admission, by his own statements. He's a person who met Cooper, that other co-founder, early on when Cooper, just like Rishi, dropped out of Vanderbilt. It was while Cooper was still at Vanderbilt. Sam kind of took him under his wing. He also did this with other crypto founders. And he helped start this movement project in terms of linking them up to investors and other things.

And then he comes up in the context of this deal because he C-Ced on emails. People say in the piece that he served as a sort of shadow co-founder, where he also worked with Cooper on the highly anticipated, also delayed yesterday for the fourth or something time move, AirDrop. He's just somebody who's involved, who's in the mix, and he's further in the mix because of this additional person. His name is Galen Law Coon. This is a business partner of Sam's. And this guy, Gallen, admitted in the piece that he is the person, I shouldn't say admitted, but he's. stated that he is the person who is behind the Rentech entity. So he said he created Rentech as a part of his company, autonomy, to kind of help link up Asian family offices with, with like, you know,

crypto firms just, you know, that needed market making services. That was, and Rentech was set up as a vehicle to make both parties kind of comfortable. He, you know, I say he admits it, but he wouldn't call it admission. He's just, this is, this is what it is. This is what we do. There's no scam here. Nobody was deceived here. Even the Movement Foundation is apparently investigating. And further, there's another character where he's like, hey, not only am I going to tell you I had this Rentech thing, this is me, but you should know that that person we mentioned before, YK Peck, according to Galin, I'll use his first name. According to Gowlin, YK, Wasey lawyer, is also his personal lawyer, the general counsel for his company autonomy. And autonomy is the company that created Rentech.

So he's basically, and he says so in the piece, he says YK knew about Rentech. He helped structure Rentech, even though now the foundation is saying they had no idea what was going on. And YK vehemently denies this. He says, you know, I was not this guy's lawyer. I gave legal help a few times. He basically insinuates that he's getting thrown under the bus here and just signed a contract, help negotiate it, make it legal, but had nothing to do with this entire thing. And he said he's disturbed by the allegation that he was involved in any more substantive way. It's so much.

And then he also pointed out he was like, on one of the documents, Gallin cites his lawyer, like Hillington something. But then I feel like there was another statement where I guess maybe Wasi has a firm that like advises a bunch of clients and autonomy was one of them or something like that. Yeah. So basically, Galin, who's based in Singapore, has a Singaporean directorship services firm where if you need to get up set up legally in Singapore, sorry, I'm talking so quickly, it's just a lot of content. You know, he has this firm that help you can pay a certain fee, and then they'll help

you set up a local director where this person will kind of sign off on things to keep in line with regulations. This is a service that people offer in a lot of different jurisdictions, and he gets a cut of, you know, whatever people pay him to set up this structure. So he did that for autonomy, but, you know, which is YK, or which I'm sorry is Galen's company, the guy who runs. rent tech and says that autonomy is actually a parent company of rent tech. Peck will say, which is YK, Wasey lawyer, will say, hey, I had no idea what rent tech was or that rent tech was a, you know, a party to autonomy in any way. I had no idea when I signed this deal. But, you know, YK says, hey, I'm sorry, Gowlin says, no, Wasey lawyer, YK, you are the general

counsel for autonomy. So of course, you know, I haven't seen any evidence that makes it clear that he knew this. But people are clearly trying to distance themselves from this deal. And I think that's the key thing here. Yeah, yeah. Reading that whole section was very much like a he-said, she-said type of thing. So I chatted with a crypto VC about this. And he had a theory, which was that movement was trying to sell tokens from the treasury on launch day to obtain cash, which they could then used to buy back the token when the team unlocks happened. So basically, the team would get like a nice price when they cashed out. And this person's take was like, this is bad. It's not transparent. And they said, quote, Cliffs are there for a reason and investors don't know these

games are being played. It's the same with the fake floats, which make the token seem much bigger than it is. So I know this is like just their theory. They also said that they think think other teams have tried to do this, but I wondered just what your reaction was to that theory. First, yes, other teams have tried to do this to my understanding and hopefully we'll report more about it. This is not just a movement story. That's why I think it got the response that it did online. But second, it seems believable. There's a lot of theories, though, out there around what happened. All we know is that this was a vehicle that deliberately or not set up a structure by which a, you know, entity Web3Port was able to sell tokens for a 50, you know, 50-50 profit split

at a favorable valuation at a $5 billion valuation. So what does that mean? Maybe the foundation got some of that money. Maybe team members got that money. Maybe Rentec got that money by scraping some money off the top. We just don't know. And I'm sure we're going to see, you know, there's an investigation into it. I'm sure we're going to see where some of these funds went.

But I can't say, I mean, that VC is probably, you know, they sell the contracts just like me. they can probably also, you know, have good theories. It's, yeah, it's, it's tough to say, is what I, you know, conclude. Yeah, I know. I'm assuming you're still reporting. And so you're like, I don't want to like say any hypothesis because what if, you know, my reporting turns out something otherwise. But I guess like at this point, you know, movement labs is conducting this investigation.

But since, and so by the way, we should all say they're conducting an investigation. But I think it was Scanlan said in a message to employees that, quote, Movement Labs was a victim in this situation. But if they're the ones conducting the investigation, like what kind of faith would you have and what they turned up? Like, what would do you feel would be the ideal way to figure out what really happened? So this is like, this was a pretty explosive thing when it came out yesterday. and you're a journalist, and I think you know as well or better than I do,

that if everybody knew, this probably would have come out a lot sooner. And so just my only hypothesis in all of this is not everybody was involved. Not all the employees were involved. It's hard to know who's even benefiting. So, you know, we don't know who's involved. So it is possible that people on the foundation side or the movement side and they're using a third party, you know, auditor, it is possible that there are enough independent people

where they're going to try to kind of sever the parties that were nominally or at least, I was going to say, were theoretically or at least nominally responsible for this, and get rid of those parties from the organization. But can we trust it? I think it's incredibly difficult for the project to win back trust after a blow like this. and whether or not I believe in the findings of this investigation, I think ultimately the market is, that's the real question.

And that's a much harder sell, I think, after something like this comes out. Yeah. So maybe then let's just turn to the Coinbase move. So I know, you know, this just broke right before we started recording, but like, what does that signify to you? It's a big deal. It's a big deal. I mean, it's very rare that in response to anything, a, it's a, an asset issuer will suspend that asset. And that just reveals that at the very least on the surface, what they saw on those contracts was troubling enough that no matter who's behind it,

it indicates some level of dysfunction or shadiness, for lack of a better word within the organization, that would make an asset issuer like Coinbase feel uncomfortable with that asset. What it tells me goes back to full circle, the beginning of this conversation, which is that those contracts to the experts that I spoke to showed at least an incentive for market manipulation, which is a big no-no, just legally, even in crypto.

That's just not something that I say even in crypto. That is just something that's frowned upon legally. And so it tells me that people are paying attention and don't feel as comfortable with this asset. One more thing I'll add is that very publicly, movement is one of many companies that you know, was invested in by Donald Trump's World Liberty Financial crypto project. And that's another thing that I'm going to be paying attention to here, which is that there's all these other stories on this. Summit CoinDest, New York Times even just have one today and yesterday or the day before, which there was a deal that was sent around to companies where if they paid

a certain amount of money theoretically to World Liberty Financial Donald Trump's, you know, the Trump-backed crypto firm, then that firm was. would buy your token as a sort of like marketing move. In other cases, like in the case of Justin Sun, like in the case of Athena, you know, Arthur Hayes, you've seen people who are in trouble with the U.S. government, you know, have, you know, investigations or charges dropped against them following the Trump-backed crypto projects investment. So whether there's any repercussions here might actually be some sort of a, you know, a hint to what's really going on behind the scenes with that much bigger, higher profile Trump side of it all.

Oh, and by that, you mean that whether or not the government steps in might be influenced by their business dealings with World Liberty Financial. I think it's going to be one more. It's just going to be one of many things that we've seen recently where there's a conflict of interest at like the highest levels of government. This isn't even conspiracy. We've just seen, they're cutting back a lot of financial crimes enforcement, white collar crimes enforcement on the federal level. And this is a direct beneficiary or the Trump project is a direct, you know, client of, you know, this move token. And so those two things combined, whether we see enforcement

action here could be a sign as to, you know, how this administration sees its friends and sees, you know, this kind of shenanigans, these kinds of shenanigans generally. Yeah. Yeah. Well, in this case, you know, it has, I guess, you could say, already impacted the World Liberty Financials holdings. So, yeah, I guess we will have to see what happens there. Okay, well, this is such an amazing, fascinating conversation. But is there anything that we didn't discuss that you think we should mention? Of course. But I think we covered a I mean, yeah, there's a lot. There's a lot. Okay. Yeah, I think we covered it. We'll have to check back in with you. We'll have to check back in with you. I've talked enough.

All right. Well, thank you so much for coming on a chained. Thanks so much for having me. Don't forget. Next up is the weekly news recap today presented by Unchained producer Pam is Jimdar. Stick around for this week in crypto after this short break. Picture this. The crypto market just got wrecked by billions in liquidations. You need to figure out what happened and what's next. But where do you even start? Meet Focal by Falcon X, your AI-powered crypto analyst. It's like having a legion of experts at your fingertips,

ready to break down market-moving events, chart Defi Protocol TVL, or explain why Solana Mindshare is rising. Get clarity in a world of noise with Focal. Learn more at askfocal.com. Welcome to this week's Crypto. Roundup. In today's recap, Ethereum gears up for the Pectra upgrade with a wave of user-focused changes, scroll and base reach key decentralization milestones, and Trump Media explores launching a utility

token. We cover circles rejection of Ripple's $5 billion offer, a federal push for a 20-year sentence for Celsius founder Alex Mishinsky, and Monaro's sharp surge following a suspicious $300 million Bitcoin transfer. We also break down a major win for tornado cash in court, BlackRock's move to tokenized shares of its $150 billion treasury fund and how Salana-based loop scale recovered from a $5.8 million exploit. Thanks for tuning in to the weekly news recap. Let's begin. Ethereum ecosystem shifts toward user focus. In the lead up to Ethereum's long-awaited Pectra upgrade next Wednesday, multiple developments across the network are signaling a coordinated shift towards user-centric improvements and decentralization. The Ethereum Foundation made

official, a revamped leadership structure, naming Shao Wei Wang and Tomas Donchek as co-execative directors. They will guide efforts to improve layer-operability, developer tools, and application layer visibility. Former executive director Ayam Miyaguchi will now serve as president, while Ethereum co-founder of Vitalik Buterin emphasized increasing, quote, meaningful usage and preserving Ethereum's foundational values. On the technical side, developers voted to exclude the controversial Ethereum object format from the upcoming Fusaka hard fork, citing risks of delay. EOF would have introduced a modular smart contract structure, but concerns over complexity and tooling gaps led to its removal.

Meanwhile, a new Ethereum client, Kakarot, announced it will deliver real-time Stark-based zero-knowledge proofs for Ethereum Layer 1 by the end of 2025. Built in Cairo and backed by Buteran and Starkware, Kakarot offers a fresh alternative ZK stack, supporting the 2028 roadmap for full ZK verification. Routing out the week, Ethereum researcher Dankrad Feist proposed EIP-9-698, a plan to raise the gas limit ceiling 100-fold over four years.

If adopted, it could boost the network's throughput to over 2,000 transactions per second without requiring a hard fork. Trump Media Ways launch of crypto token. Trump Media and Technology Group, TMTG, parent company of Truth Social and Truth Plus, has informed shareholders it is exploring the launch of a native crypto-usility token alongside a digital wallet. According to a letter sent by CEO Devin Nunes on April 29, the proposed token would initially serve as a payment method for Truth Plus subscriptions and later expand to cover additional

products and services within the broader, quote, Truth ecosphere. The initiative is part of a wider rewards program TMTG is developing across its platforms, which also include the financial services branch, truth.fi. The company previously filed a trademark in November for software enabling digital wallets and crypto payments. Following the announcement, the price of Trump's salonabased mean coin, Trump, fell more than 6% before recovering slightly. Circle rejects Ripple's $5 billion takeover bid. Circle has reportedly turned down a takeover bid from Ripple value between $4 billion and $5 billion, according to sources cited by Bloomberg. The bid came shortly after Circle filed for an initial public offering and was deemed too low compared to the cost.

company's internal valuation. Circle was previously valued at $9 billion during a failed SPAC merger in 2022. Ripple's proposal is part of its broader strategy to expand in the stablecoin market following the December launch of its RLUSD token. RLUSD currently holds a market cap of approximately $317 million, significantly smaller than Circle's USDC, which commands a $61.7 billion market share. Prosecutors seek 20-year sentence for Celsius founder. Federal prosecutors are calling for a 20-year prison sentence for Alex Mishinsky, the former CEO of Crypto Lender Selsius Network, who pleaded guilty in December 24 to a multi-year scheme that misled customers and manipulated token prices. In a sentencing memo filed ahead of his May 8 court date, prosecutors described Mishinsky as the architect of a, quote, deliberate, calculated fraud that ultimately resulted in nearly $7 billion in user losses. Mishinsky admitted to falsely assuring investors that SELCES was a safe alternative to banks,

even as the firm took uncollateralized loans, placed risky bets, and secretly used customer assets to inflate the value of its sell token. While publicly claiming to, quote, Hoddle, Mishinsky privately sold over $48 million worth of sell. At its peak, Celsius managed more than $20 billion in assets before collapsing into bankruptcy in July 2022. Defense attorneys argue Moshinsky deserves no more than a year in prison, citing difficult life circumstances and market volatility. Monaro surges amid suspected $330 million Bitcoin laundering scheme. Monaro XMR, the privacy-focused cryptocurrency cryptocurrency-this week following a suspicious $330 million Bitcoin transfer that investigators believe may be tied to theft in laundering. Blockchain analyst Zach XBT flagged

the movement of $3,520 Bitcoin, noticing the funds were funneled through at least six instant exchanges before being converted into Monero, a token known for its privacy-enhancing features. The surge pushed XMR to a high of $347 before settling lower. The transaction raised further intrigue after derivatives' market data showed open interest in XMR more than doubled to $35.1 million. Suggesting coordinated long positions may have been established in parallel with the spot purchases. Analysts likened the activity to previous market manipulation schemes that used low liquidity assets to influence derivative prices. Federal judge blocks future sanctions on tornado

cash. A federal court in Texas has ruled that the U.S. government cannot reimpose sanctions on tornado cash without new legal justification, marking a major legal win for the crypto privacy protocol and its users. The decision issued by Judge Robert Pittman follows a long-running legal battle over whether the Treasury Department's Office of Foreign Assets Control, OFAC, exceeded its authority by targeting smart contracts operated by the decentralized mixer. Although OFAC delisted tornado cash in March, plaintiffs argued that the agency could still reinstate sanctions at any time, creating lasting uncertainty for users.

Judge Pittman sided with them, issuing a permanent injunction that blocks any future action unless supported by a new legal rationale. The case began in 2022 after OFAC sanctioned tornado cash, alleging its role in laundering billions in crypto, including funds tied to North Korea's Lazarus Group. The ruling does not affect the ongoing criminal cases against the protocol of developers, Roman Storm and Roman Seminoff. BlackRock files a tokenized shares of $150 billion Treasury Fund.

BlackRock has filed with the U.S. Securities and Exchange Commission to launch a new blockchain-based share class for its $150 billion liquidity treasury trust fund. The initiative would use distributed ledger technology to mirror fund ownership records, with Bank of New York Mellon managing the digital infrastructure. The DLT shares will not hold cryptocurrency, but aim to streamline operations by recording ownership on a blockchain. The minimum investment for the new share class is set at $3 million, and BNY Mellon will serve as the exclusive distributor.

While the underlying assets remain U.S. Treasury securities, the move represents a growing push among traditional financial institutions to explore tokenization, the process of representing real-world assets on chain. This is not BlackRock's first foray into tokenization. Its digital liquidity fund, Biddle, now holds over $1.7 billion in assets. CEO Larry Fink has repeatedly highlighted tokenization as a key innovation in modern finance. Scroll and base reach key decentralization milestones. Scroll and base, two major Ethereum layer two networks, have both reached, quote, stage one

roll-up classification, marking a major step toward decentralization and enhanced user security. This status follows a successful rollout of permissionless exit options, decentralized governance, and safety mechanisms that reduce dependence on centralized operators. scroll became the first zero-knowledge roll-up to achieve this benchmark following its Euclid upgrade. The update introduced censorship-resistant features, a user-controlled exit process, and a 12-member security council with strict rules limiting insider influence. Scroll also launched Open VM, a new system devolved with Axiom that enables more efficient proof generation by breaking down large transactions.

Coinbase's optimistic roll-up base announced its own transition to stage one as well. The move included enabling permissionless fault proofs and installing a 10-member global security council. Quote, these are folks from the base ecosystem and from the broader Ethereum ecosystem. Tom Vieira had a product at base, told CoinDesk. Loopscale exploited for $5.8 million. Solana-based lending protocol Loopscale was exploited for $5.8 million on Sunday, just two weeks after its official launch. The attack targeted vaults holding USDC and Sull, draining a plight, draining a price. approximately 12% of the platform's total value locked.

The hacker exploited a vulnerability in Loopskills integration with Rate X, a decentralized exchange used for trading synthetic yield tokens. By manipulating Rate X's PT token pricing mechanism, the attacker was able to secure under-collateralized loans and extract funds. The exploit affected only select vaults and did not compromise the broader Rate X collateral system or unrelated users. Loopscale immediately paused lending operations and reached out to the attacker with a white hat offer.

Within 48 hours, the attacker agreed to return 90% of the stolen assets in exchange for a 10% bounty, around 3,900 soul and immunity from legal action. By Tuesday, Loupskill confirmed the return of all stolen funds, totaling over $5.7 million USDC and 1,200 sole. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchainedcrypto.bhive.com. that is Unchained Crypto.Behive.com. And sign up for a free newsletter so that you can stay up to date with the latest in crypto.

Unchained is produced by Laura Shen, with help from Matt Pultured, Juan Aranovich, Megan Gavis, Margaret Curia, and me, Pamajumdar. The weekly recap was written by Wanneranovich and edited by Stephen Erlich. Thanks for listening.