Movement Labs Files Chapter 11 as MOVE Token Sits 94% Below Launch Value

Movement Labs, the developer behind the Movement Ethereum layer-2 network, has filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware, listing under 1,000 creditors, between $100,000 and $500,000 in assets, and more than $1 million in liabilities. The filing, submitted July 15 under Subchapter V — a streamlined reorganization track for qualifying small businesses — lands after the project’s MOVE token has fallen more than 94% over the past year.

Court records show the company’s largest creditors include co-founder Rushi Manche, the Delaware Division of Revenue, and custodian Anchorage Digital. The court approved interim relief allowing Movement Labs to keep its bank accounts and cash-management systems running and to draw debtor-in-possession financing to fund operations while it restructures. Creditors have until September 14 to file claims.

A 66 million-token sale that never recovered

The bankruptcy caps a year of turmoil that traces back to a market-making agreement signed around MOVE’s December launch. Documents reviewed by CoinDesk showed the deal handed market maker Web3Port, via intermediary Rentech, control over 66 million MOVE — roughly 5% of total supply — which was dumped into the market just one day after the token debuted.

That single-day sale reportedly generated around $38 million in downward price pressure on MOVE and triggered an internal investigation. Movement Labs suspended co-founder Rushi Manche in May 2025 over his role in brokering the arrangement. Coinbase pulled MOVE from its listings that same month after determining the token no longer met its standards, and reports indicate Binance also took action tied to the market maker’s conduct. A token buyback followed as the project tried to contain the fallout, but it wasn’t enough to stabilize the price.

Ecosystem operator says it isn’t affected

The scandal and its aftermath prompted a restructuring of who actually runs the Movement ecosystem. Move Industries took over development and operations from Movement Labs in December 2025, months before this bankruptcy filing. Move Industries CEO Torab Torabi wrote on X that the Chapter 11 petition applies only to Movement Labs and that Move Industries continues to operate normally.

That distinction matters for anyone still holding MOVE or building on the layer-2: the bankruptcy is a corporate-entity event tied to the original development company’s legacy liabilities, not a shutdown of the chain itself. Subchapter V filings are designed precisely for this kind of scenario — letting a company keep operating under court supervision while it works out a repayment plan with creditors, rather than liquidating.

Why it matters for holders

For MOVE holders and traders, the numbers tell the story: a token that has shed more than 94% of its value in a year, an exchange delisting from a top-tier venue, and now a bankruptcy filing against the entity that built it. Anchorage Digital’s presence among the largest creditors also underscores how far the fallout reached into the token’s custodial and institutional relationships.

The case will now proceed through Delaware bankruptcy court, with the September 14 creditor claims deadline serving as the next concrete milestone. Whether Movement Labs emerges from Subchapter V with a viable restructuring plan — or whether liabilities exceed what its limited assets can cover — will determine what, if anything, remains of the original development company behind one of 2025’s most closely watched token launches.

Sources

• cointelegraph.com
• coindesk.com