Recent collapses involving Movement Labs’ MOVE token and Mantra’s OM have sent shockwaves through the crypto market-making industry, forcing a hard look at how liquidity is structured and the level of trust placed in project teams.
“These scandals have fundamentally changed the way market makers approach relationships with projects,” said Zahreddine Touag, Head of Trading at Woorton. “Trust can no longer be taken for granted; it must be carefully built through transparency and full disclosure.”
The rapid declines in MOVE and OM prices exposed hidden token holders, undisclosed token unlock schedules, and secret side deals that blindsided many market participants. OM’s token lost over 90% of its value in hours during late April without any clear catalyst.
Unlike in traditional finance—where market makers provide orderly liquidity through regulated venues—crypto market makers often wear multiple hats. They negotiate token allocations, manage lockups, provide exchange liquidity, and sometimes accept advisory roles or equity stakes in projects.
This blurred role creates an opaque environment where market making is deeply intertwined with private deals and insider agreements.
An investigative report by CoinDesk revealed that Movement Labs executives allegedly coordinated with their market maker to dump $38 million worth of MOVE tokens, further shaking confidence in market-making practices.
As a result, many firms are revising their approaches to managing counterparty risk and liquidity provision. Questions around opaque token unlocks and informal agreements have sparked calls for more rigorous due diligence.
“We now engage in thorough preliminary talks with project teams to ensure they understand the complexities of market making,” a spokesperson for Metalpha’s market-making division told CoinDesk. “We emphasize long-term partnerships and have implemented safeguards against unethical practices like token dumping and fake volume.”
Legal departments have stepped up their role as well. “At B2C2, we’ve increased legal scrutiny, enforcing tokenomics terms and establishing contingency plans for breaches,” said Dean Sovolos, Chief Legal Officer at B2C2. “The MOVE and OM incidents exposed latent risks that we are now addressing through tighter contracts and stronger technical safeguards.”
Some market makers are demanding greater transparency, while others are choosing to avoid projects with unclear governance altogether.
“Reputation alone no longer suffices,” said Max Sun, head of Metalpha’s Web3 ecosystem. “Even well-known players have abused shadow allocations and engaged in harmful selling. The era of blind trust is over.”
Behind the scenes, a sprawling secondary OTC market complicates supply dynamics, as locked tokens trade privately long before public vesting schedules.
“The OTC secondary market has changed the game,” said Min Jung, analyst at Presto Research. “Tokens with suspicious price moves like $LAYER, $OM, and $MOVE are often the ones heavily traded off-exchange, distorting supply and price discovery.”
In today’s market, the biggest risk isn’t volatility alone—it’s the false assumption that circulating supply matches official disclosures, leading to mispricing and increased uncertainty.
