Crypto market maker are in may ways the backbone of the crypto industry, even more so than classic market makers are in traditional finance.
TradFi Market Makers
In traditional finance, the role of market makers is clearly defined. Whether individuals or firms, market makers operate on regulated exchanges like the NYSE or NASDAQ and continuously buy and sell during trading hours. More precisely, they quote buying prices — called the “bid” — and selling prices — called the “ask” — for securities.
By continuously providing liquidity and transacting at equilibrium prices with a narrow gap between the bid and ask, market makers help prevent extreme price swings, ensure market depth, and operate under strict transparency and fairness rules, under heavy regulatory oversight.
They bank in by “capturing” the bid-ask spread. The bid is the highest price a market maker is willing to pay for a stock, while the ask is the lowest price they are willing to accept to sell it.
For example, a market maker might quote a bid of $150 — meaning they will buy shares at that price — and an ask of $151 — meaning they will sell shares at that price. They profit from the $1 difference between the buying and selling price, known as the spread.
Although crypto market makers, like traditional market makers, also maintain market liquidity and price stability, they often play a more organic and integrated role within the crypto ecosystem.
Crypto Market Makers
As we just mentioned, crypto market makers, like their traditional counterparts, play a foundational role in maintaining liquidity and facilitating price discovery across the crypto ecosystem — from supporting token creators and exchanges to enabling smoother trading experiences for retail users.
According to Flexe data, a crypto trader can gain approximately 93.33% in trading cost efficiency when a market has multiple active market makers, reducing spreads to around 0.01%, compared to less popular markets with limited market-making activity, where spreads may reach 0.1% to 0.2%.
But crypto market makers often face greater risks than their traditional counterparts due to extreme market volatility, regulatory uncertainty, technical challenges, and — more importantly — the various and riskier responsibilities they take on.
They are notably involved in early-stage token projects.
New tokens are in dire — in fact, vital — need of market-making liquidity at launch. When a new crypto token appears on an exchange, natural market liquidity is often very low or almost zero if there are few buyers and sellers at the start.
Even if it has some natural liquidity, it can quickly develop wide price gaps. Large spreads can deter investors, while the token battles high volatility and price jumps, making it appear more like a wonky, trashy token than the blue-chip reputation it tries to establish at launch.
They form a mutually beneficial agreement that usually includes:
- Pre-launch token allocations — Before a token is publicly available, market makers sometimes negotiate directly with project teams to acquire large blocks of tokens at discounted rates or as part of strategic partnerships.
- Accepting lockups — Market makers often agree to “lock” or hold these tokens for a set period to avoid flooding the market and crashing prices. This means they commit capital upfront without immediate liquidity.
- Structuring liquidity for centralized exchanges — They don’t just provide buy/sell quotes; they help design how much liquidity, token supply and buy/sell orders, will be on exchanges when the token launches, influencing how smoothly trading starts.
- Taking equity or advisory stakes — Sometimes, market makers receive not only tokens but also shares in the company or advisory roles. This ties them directly to the project’s success or failure beyond just trading profits.
Most memecoins launch on Pump.fun aside, market makers are the lifeline of the crypto market.
They provide a significant portion of the trading volume for major cryptocurrencies, including Bitcoin and ETH — estimates suggest this can be as high as 60 to 70% across the broader crypto market, though exact figures vary by exchange and asset.
With such a strategic stake in the crypto market, market makers can, by design, find themselves sliding down the slippery slope of market manipulation, and the profession as a whole trails behind it with many whispers of being puppet masters who rig the crypto market and use retail traders as exit liquidity.
But as the MOVE and Mantra scandals also proved, market makers who apparently play by the book can find themselves on the other end of the puppet strings — controlled by those they are dealing with.
Although the events that triggered their monumental meltdowns differed, the MOVE and Mantra scandals had a similar impact — shattering the implied trust within the market-making industry.
Movement Labs’ MOVE Scandal: A Hidden Self-Destructing Deal
Founded in 2022 by Rushi Manche and Cooper Scanlon, Movement is a Layer 2 blockchain built to scale Ethereum using Facebook’s Move programming language.
It was one of the most anticipated token launches in recent years. Before its debut, Movement Labs had raised $3.4 million in pre‑seed and then $38 million in a Series A round led by Polychain in April 2024, with support from Binance Labs, OKX Ventures, and more.
In early 2025, it was reportedly closing in on a $100 million Series B that could have valued the company at around $3 billion.
Based on its reputation and industry backing, market makers and investors expected a trusted partner — one that wouldn’t jeopardize its ambitions en route to unicorn status and would operate with impeccable rigor.
Oh well, they were in for a ride.
The truth only began to emerge months after launch. In mid-March 2025, Binance banned a Movement Labs–contracted market maker, froze its $38 million in profits, and informed Movement’s team. Then on May 1, 2025, Coinbase announced it would suspend and ultimately delist MOVE, citing non‑compliance amid an ongoing investigation — all actions tied to token‑dump revelations.
But it was Coindesk thorough investigation that publicly revealed the shocking dealings that had happened behind closed doors.
On December 9th, 2024, MOVE burst onto the scene with palpable enthusiasm and effervescence: trading volumes reached nearly $450 million in the first 90 minutes, while on-chain activity surged dramatically within the first 24 hours — Santiment later reported an astonishing $6.34 billion in transaction volume, signaling both retail speculation and intense airdrop farming interest
The very next day, 66 million tokens, ~5% supply, around half of the circulating tokens, were aggressively sold, raising $38 million and crashing the token from over $1 to lows near $0.22.
The entity behind the crash? A certain “Rentech.”
Coindesk rewinded back the course of the event, and this is what allegedly happened.
It’s quite the entangled, headache-inducing story that begins and ends with Rentech — and involves at least two key players within Movement: its co-founder Rushi Manche and Sam Thapaliya, an extremely involved “informal adviser.”
On November 27th, 2024, just two weeks before the token launch, Rushi Manche suddenly sent a new market-making contract to the Movement Foundation, which oversees the token, for signature.
The clauses in the contract were peculiar, to say the least.
Rentech, an unknown-to-the-battalion, zero-credential market maker, was asking for:
- the loan of 5% of the MOVE token allocation, which would represent half of the publicly circulating tokens at launch!!!
- the ability to liquidate its MOVE tokens if the fully diluted value exceeded $5 billion — profits from which would be split evenly with the Movement Foundation.
Not only would this agreement hand over control of MOVE’s market to a single, popped-out-of-nowhere entity, but it was also blatantly inviting market manipulation by creating the fake liquidity depth necessary for the MOVE price to cross the $5 billion threshold.
Suspicious doesn’t even begin to cover it.
Unsurprisingly, YK Pek, the Movement Foundation lawyer, and Marc Piano, director of the foundation, gave a fierce, brutal, and mocking rebuttal to the agreement. YK Pek called it “possibly the worst agreement I have ever seen […]” while asking, “What is even the rationale behind this?”
Rentech would not be deterred. They allegedly successfully passed themselves off as a subsidiary of Web3Port, a well-known Chinese market maker, when in fact they were an independent shell company inserted midway.
While busy convincing Movement Foundation on one side, they were simultaneously dealing with Web3Port on the other.
Two days before sending the proposed agreement to Movement — on November 25th — Rentech struck a deal with Web3Port, acting, listen carefully, as a representative of Movement!
So when Rentech proposed the deal, Movement Foundation officials didn’t even know they had already contracted with Web3Port under substantially the same contract terms proposed on November 27th and rejected, all without their knowledge.
To this day, how and why Rentech was able to act as a representative of Movement remains unknown, or if it was even lawful.
We only barely learned of the existence of this previous contract through the Coindesk investigation.
Rentech, posing as a respectable Web3Port subsidiary, pushed the agreement to Movement by proposing to front $60 million of its own collateral.
Allegedly, Rentech was heavily aided in its quest to conquer Movement by two insiders: Movement co-founder Manche, who first put the agreement on the table, and Sam Thapaliya, presented as an advisor to Movement and Manche. However, the extent of his involvement earned him the label of a “shadow third co-founder” of Movement among employees. Notably, Thapaliya was entrusted by Cooper Scanlon, Movement’s other co-founder, to help curate MOVE’s airdrop whitelist within the community.
The issue? Rentech was founded by Galen Law-Kun, Thapaliya’s business partner.
Ten days after initially rejecting the first agreement, on December 8th — one day before the token launch — Movement entered into a market-making contract with Rentech/Web3Port.
This time, Web3Port — not Rentech — was listed as the borrower. However, the contract was signed by a Rentech director whose email was linked to a domain, web3portrentech.io, registered the very same day the contract was signed.
The market-making contract terms remained generally the same, minus the abusive clause that gave Web3Port the power to sue the Movement Foundation if their token failed to be listed on a certain crypto exchange.
Meanwhile, Web3Port was allowed to borrow 5% of MOVE but under a changed payout structure.
There was no public or private disclosure of the agreement — everyone except the main architects of this debacle was left in the dark, despite the fact that it was so monumental and structural it brought massive risk to the project, its investors, and its community.
The Movement token debacle was allegedly the direct product of secret agreements, two-faced eminence grises, and an unwise or ill-intentioned co-founder who brought the next blue chip to its knees in minutes.
The Collapse of Mantra’s OM: A Case of Insider Manipulation?
The Mantra scandal is another significant event in the crypto market that exposed vulnerabilities in token governance, market-making practices, and transparency.
Mantra is a DeFi project that launched its native token, OM. Initially, the token was well-received by the community and investors, gaining traction as part of Mantra’s broader ecosystem. On February 27th, 2025, OM reached a new all-time high (~$8.20). It also hit key milestones, such as being officially listed on Bybit and launching its mainnet — marking its entry into the RWA (Real World Assets) space.
But the first cracks started to appear when, on March 14th, 2025, Mantra unexpectedly slashed a massive number of wallets from eligibility for its upcoming airdrop — down to 217,351 eligible wallets from a much larger pool — triggering accusations of insider manipulation.
This was followed on March 18th by a second purge, which removed another 123,195 wallets, further fueling outrage over the airdrop’s fairness.
Things then took a dramatic turn in mid-April 2025, when the price of OM suddenly plummeted by over 90% within just a few hours on April 13th, wiping out massive value for investors.
The Mantra team, led by CEO John Patrick Mullin, has consistently denied any involvement in the crash.
They attributed the sudden price drop to “reckless forced closures” initiated by centralized exchanges (CEXs) against OM account holders. Mullin emphasized that these actions were taken without sufficient warning — especially during low-liquidity hours — suggesting negligence, or possibly even intentional market positioning by the exchanges.
Despite the accusations, the actions taken by centralized exchanges seem to have been routine position liquidations in response to the ongoing crash — accelerating its pace mechanically, but not deliberately.
No, the core of the scandal lies elsewhere.
It involved hidden agreements and opaque token unlock schedules that were not clearly disclosed to the public or market participants. Market makers and early insiders had access to large amounts of OM tokens, which were supposedly locked or subject to vesting schedules.
However, behind the scenes, some of these tokens were allegedly unlocked or sold off unexpectedly, flooding the market with supply and causing the price to crash rapidly.
Investigations revealed that certain early investors and insiders engaged in what appeared to be coordinated dumping of tokens, taking advantage of their privileged positions and confidential arrangements.
Blockchain analytics platforms like Lookonchain and Arkham Intelligence reported that at least 17 wallets moved a combined 43.6 million OM tokens — worth approximately $227 million at the time — onto exchanges before the crash. Notably, two of these wallets were linked to Laser Digital, a strategic investor in Mantra. However, Laser Digital denied ownership of these wallets, labeling the information as “mislabeled.”
Further complicating the situation, a wallet associated with Shane Shin, a founding partner of Shorooq Partners, received 2 million OM tokens just hours before the crash. Shin denied any involvement in the sell-off, stating it was merely a wallet-to-wallet transfer.
According to crypto sleuth ZachXBT, Denko, REEF Finance founder, and Fukogoryushu were either aware of or actively involved in coordinating the price crash, as they had allegedly reached out to a number of people asking for massive loans against their OM in the days leading up to the -90% crash.
For ZachXBT, it’s a very plausible theory, as REEF Finance had experienced the same type of market manipulation before delisting.
Apparently, the OM market was quite easy to manipulate, as it lacked liquidity depth. One trader reportedly initiated a $1 million short position on Binance, leading to rapid slippage and triggering a cascade of liquidations across multiple exchanges.
It’s hard to believe, given those circumstances and the evidence, that the Mantra crash could be anything beyond a coordinated insider extraction. What we don’t know — compared to the MOVE meltdown — is the true scope of both the manipulation and the actors involved. What shady deals between whom streamline this story? Market makers? Mantra team members? All of them together?
The impact on Mantra’s price and reputation has been long-lasting; three months after its freefall, it remains in bloody tatters.
But those long-lasting effects are also impacting the broader crypto community.
These back-to-back traumatic market events — each involving what many saw as strong, sturdy, and serious cryptocurrencies that behaved as haphazardly and shadily as the most obscure memecoins — have made everyone take a step back, especially market makers, who are first in line not only for profits but also risks.
