Weekly Recap: The Movement Scandal, OP_RETURN War, and the Decline of Crypto Assets

Back to February highs

Bitcoin didn't start the week very strong - at levels around $94,000, dipping just below $93,000 throughout the day.

After a brief sideways move on the last day of April, the price began a rapid northward movement. The recovery took place on the background of a surge of activity of short-term investors.

On May 1, the price exceeded $96,000 for the first time since February, and then $97,000. The crypto market capitalization reached $3 trillion - the March level.

In addition to the revival of onchain activity, there was a significant increase in open interest in bitcoin futures.

All week, the cryptocurrency Fear and Greed Index has indicated guarded optimism among market participants.

Ethereum opened the week near the $1800 mark. On April 30, the price fell to $1731, but the next day it confidently recovered.

Movement Labs has entered into the ”worst deal in history”

Movement Labs' Movement Labs team is investigating the circumstances surrounding a deal with marketmaker that led to a dump of 66 million MOVE tokens and a drop in the asset's price shortly after its listing.

According to employee correspondence, Movement Foundation transferred 66 million MOVE tokens (5% of the issue) to Rentech, a middleman with no public reputation. 

The contract allowed the firm to sell the tokens when the market capitalization of the project reached $5 billion, creating an incentive to inflate the price and then sell out, experts told CoinDesk.  

On Dec. 9, a day after MOVE was listed on exchanges, wallets affiliated with Rentech and marketmaker Web3Port withdrew $38 million, triggering a 47% drop in price. 

Binance locked the marketmaker's account for ”violations,” and Movement announced a token buyback to stabilize the market. 

Movement Foundation legal counsel Y. K. Peck initially called the contract with Rentech ”the worst agreement in history,” but signed an amended version under pressure. He warned that the deal would transfer control of MOVE's liquidity to a ”non-transparent entity.”  

The investigation revealed that Rentech was acting as an agent for both Movement Foundation and Web3Port, which may have allowed it to dictate terms. Rentech founder Galen Lo-Kun claims that the structure of the deal was agreed upon with Peck, but the latter denies involvement.

CoinDesk's sources point to the possible involvement of Movement Labs co-founder Rushi Manche and project advisor Sam Tapalia. Rentech founder Galen Lo-Kun is reportedly one of Tapalia's business partners.

Internal chats show that Manche promoted the Rentech deal, ignoring objections from lawyers. Tapalia, who was present in Movement's office on the day of the token's launch, was involved in building the lists for Airdrop, but denies influencing the company's decisions.

According to industry veteran Zach Manian, Movement's contracts created the perfect conditions for the Pump & Dump scheme. Market makers could artificially inflate the price and then ”dump” the tokens on retail investors, he explained.  

Movement Labs hired accounting firm Groom Lake to analyze the transactions.  

Experts named insider manipulation as the reason for the recent collapse of the token of RWA-project Mantra by 90%. The coin under the ticker OM lost $5.5 billion in capitalization.Movement Labs co-founder Rushi Manche was suspended on May 2 amid an investigation.

Bitcoiners have returned to the OP_RETURN controversy

Developer Peter Todd has created a request for a change to the Bitcoin Core code that would lift restrictions on storing arbitrary data on the blockchain. The initiative has divided the community.

It is about removing the 83 byte limit in the technical parameters of the OP_RETURN script. If the limit is removed, node operators will be able to publish large amounts of data like media files into transactions. 

In the proposal, Todd formalized an initiative by Antoine Poinço of Chaincode Labs. Both developers believe it is ”silly” to hold on to parameters that don't work, as users easily circumvent the limit by broadcasting transactions through private mempools like MARA Slipstream or Bitcoin Core alternatives like Libre Relay.

Some commenters have supported the removal of essentially unnecessary code. 

Others, even while recognizing the ineffectiveness of the limit for OP_RETURN, opposed its removal. They believe that lifting the limit promotes the spread of spam on the network and threatens bitcoin's position as a financial asset.Bitcoin Core developer Luke Dash, Jr, known as an implacable opponent of Ordinals and BRC-20 tokens, called Todd's proposal ”complete insanity.”

The programmer noted that the ”attack” by ”arbitrary data spammers” has been going on for more than two years.

Founded by Dash and Jack Dorsey, the incentivizes miners to ignore non-financial transactions by charging fees.

Casa co-founder and CTO Jameson Lopp stated the return of the ”OP_RETURN wars” and reposted a statement claiming the failure of OCEAN's censorship policy.

A bitcoiner under the nickname Bryan called Todd's proposal ”technically logical and correct.”

However, the user sided with critics of the decision, emphasizing that opponents like Dash are right from a strategic point of view. In his opinion, the growth of data volume is threatening in the long term:

• The ”bloat” of the blockchain;
• rising costs of operating a node (hardware, bandwidth);
• centralization pressure (only wealthy players will be able to afford full nodes);
• by weakening the narrative of bitcoin as a trustworthy currency.

CoinGecko pointed to the ”extinction” of cryptoassets

Of the nearly 7 million crypto assets tracked by DEX tracker GeckoTerminal since 2021, trades discontinued by 3.7 million - more than half. These projects are considered to have failed, CoinGecko analysts believe.

During the first quarter of 2025, the collapse hit 1.8 million tokens - 49.7% of all crypto project failures recorded by CoinGecko.

The total number of crypto projects has also increased dramatically: if in 2021, 428,383 coins were added to GeckoTerminal, by 2025 this figure was already close to 7 million.

Analysts attribute this explosive growth to the launch of Pump.fun - a ”meme-token factory” that radically simplified the process of creating coins. Thanks to it, new cryptoassets began to appear literally in minutes and almost effortlessly.

The number of projects ”collapsed” in the first quarter of 2025 reached 1.8 million (49.7% of the total) - more than in any other year.

Ethereum is set to get a ”neutral rollup”

Of the nearly 7 million crypto assets tracked by DEX tracker GeckoTerminal since 2021, trades discontinued by 3.7 million - more than half. These projects are considered to have failed, CoinGecko analysts believe.

The key idea behind R1 is to return to Ethereum's core values of decentralization and neutrality.

According to the creators, instead of venture capital funding or asset sales, the project relies solely on donations. In their opinion, this is the way to achieve true neutrality and alignment with the interests of the ecosystem.

The new rollup is built on Nethermind's Surge technology stack and uses open source code from Taiko. DAO Taiko will receive 1% of the network's base commissions until 2030 or the burning of all commissions.

As envisioned, Ethereum R1 will launch immediately as a Stage 2 rollup - a fully decentralized system run by smart contracts.