Recent incidents involving the MOVE and OM tokens from Movement Labs and Mantra have raised significant concerns in the market-making world. These events challenge current practices and demand a reassessment of liquidity approaches in the crypto market.
Reasons Behind the Scandals
The controversy began when the MOVE token crashed after revelations surfaced that insiders colluded with a market maker to dump $38 million worth of tokens while outwardly promoting the project. Similarly, the OM token plummeted by over 90% in a matter of hours, despite no official news or catalyst.
OTC Market as a Hidden Risk
The rise of the secondary OTC market is also fueling the situation. Due to a lack of regulation, tokens that are locked are still sold behind closed doors, usually long before planned vesting dates. Analyst Min Jung from Presto Research states, "Tokens with erratic trading patterns like $MOVE and $OM are also the ones most actively circulated on the secondary OTC market."
A New Reality for Market Makers
In response to these developments, many market-making firms are tightening deal structures and demanding greater disclosure. Max Sun, head of Web3 at Metalpha, noted, "Projects no longer accept reputation at face value. The era of presumptive trust is over."
The MOVE and OM scandals are catalysts for reform in the crypto market-making space. Previously opaque practices are now pushing for higher standards of transparency and ethics.
