Movement Labs, the developer behind the Movement blockchain, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware, marking the latest setback for the cryptocurrency startup after months of governance disputes, a controversial token launch, and a failed strategic upgrade.
The San Francisco-based company filed under Subchapter V, a streamlined bankruptcy process for small businesses, allowing it to continue operating under court supervision while restructuring its debts, as per the CoinDesk report.
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Financial Position
According to the bankruptcy filing, the company reported fewer than 1,000 creditors, with estimated assets valued between $100,000 and $500,000 against liabilities exceeding $1 million. The business listed co-founder Rushi Manche, the Delaware Division of Revenue, and Anchorage Digital among its largest creditors.
MOVE Token Controversy
The company's financial troubles stem from the December 2024 launch of its MOVE token. Originally developed as an Ethereum Layer 2 network using Meta's Move programming language, Movement came under scrutiny after a controversial market-making agreement enabled the sale of 66 million MOVE tokens just one day after the token's debut.
The arrangement, involving intermediary Rentech and market maker Web3Port, contributed to a sharp collapse in the token's value and triggered internal investigations. While Movement executives later questioned whether they had been misled about Rentech's relationship with Web3Port, Rentech denied any wrongdoing.
Company Response and Future Strategy
The fallout intensified after Binance banned the market-making account linked to the incident over alleged misconduct. Movement Labs responded by launching a token buyback programme and appointing external investigation firm Groom Lake to review the circumstances surrounding the token launch. Co-founder Rushi Manche left the company in May 2025 and later filed a lawsuit against the startup in Delaware, according to CoinDesk.
In June 2026, a separate legal entity, Move Industries, announced a strategic shift away from competing as an Ethereum Layer 2 network, instead focusing on cross-border payments, remittances, and stablecoin settlements across the United States, Canada, and the European Union.
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However, the bankruptcy filing has cast uncertainty over the future of the blockchain project, its partnerships, and its long-term payments strategy.
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