Movement Labs, the original core development company behind the Movement blockchain, has filed for Chapter 11 bankruptcy protection in Delaware, marking a sharp reversal for a once highly funded crypto infrastructure startup and drawing a clearer legal line between the failed operating company and the groups now trying to keep the network alive.
The filing, submitted on July 15 in the U.S. Bankruptcy Court for the District of Delaware, listed assets of between $100,001 and $500,000 and liabilities of as much as $10 million. The company named up to 299 creditors, according to court documents.
The case comes after months of pressure tied to the troubled launch of the MOVE token, internal disputes, management changes, legal claims, and a major restructuring of the broader project. While Movement Labs was once the main research and development arm for the Movement Network, core blockchain work has since shifted to a separate company, Move Industries.
That distinction is now central to the project’s future. The bankruptcy case applies to Movement Labs, the original company. Move Industries, which is now associated with ongoing technical development, says it is not part of the bankruptcy proceeding.
The legal separation may help the active network continue operating, but it does not remove the market damage. MOVE has suffered a severe collapse since its late-2024 launch period, with market data showing the token recently falling to a record low near $0.0104. Compared with a quoted peak of $1.45 in late 2024, that represents a drawdown of more than 99%, leaving the token’s market value at roughly $45 million.
For traders, the bankruptcy filing adds another layer of uncertainty to a project already trying to rebuild trust after one of the more disruptive token launch episodes in recent crypto memory.
Bankruptcy filing details
Chapter 11 is commonly used by companies that want to reorganize rather than shut down immediately. It allows a business to remain under court supervision while it works through creditor claims, possible asset sales, repayment plans, or other restructuring steps.
In Movement Labs’ case, the numbers in the filing show a company with limited disclosed assets and a much larger potential debt burden. The filing listed liabilities of up to $10 million, while available assets were placed below $500,000.
The largest unsecured claim was attributed to co-founder Rushikesh “Rushi” Manche, who is listed as being owed more than $1.6 million. The filing also states that Manche continues to hold a 34.25% equity stake in Movement Labs.
That detail is notable because Manche had previously been terminated following an internal investigation into the MOVE token launch incident. His continued stake shows that, despite his removal from management or operating duties, the corporate ownership structure had not been fully unwound before the bankruptcy case.
Other creditors listed in the filing include the Delaware Division of Corporations, reportedly owed about $459,000, along with Move Industries, Anchorage Digital, and security auditing firm Ottersec.
The inclusion of Move Industries as a creditor does not mean it is part of the bankruptcy. It means Movement Labs listed it among parties that may have claims against the old company.
The dispute involving Manche
Before the bankruptcy filing, Manche had already taken legal action against Movement Labs in Delaware’s Chancery Court.
He sued the company and was awarded payment of legal fees connected to a Department of Justice grand jury inquiry tied to the MOVE token launch. The inquiry related to the same broader set of events that later became central to the company’s internal review and leadership shake-up.
The court documents suggest that the dispute between Manche and Movement Labs had moved beyond internal governance and into formal legal proceedings before the Chapter 11 case began.
Manche’s role remains complicated. He was a co-founder, remains a major equity holder, and is now the largest listed unsecured creditor. At the same time, he was removed from the company after the internal investigation connected to the token launch controversy.
More recently, Manche has also launched a new $100 million venture fund to back technology founders. That new business effort appears separate from the current daily operations of the Movement Network and separate from Move Industries’ work. Traders and industry observers are likely to treat his new fund as an independent move rather than a direct signal about the network’s technical condition.
A token launch that changed the company
Movement Labs had been built around the Movement Network, originally described as an Ethereum Layer 2 blockchain using the Move programming language. Move was first developed for Meta’s discontinued stablecoin project and later became a foundation for several blockchain ecosystems focused on security, asset control, and high-performance execution.
The project attracted significant funding before its crisis. Movement Labs raised tens of millions of dollars across multiple rounds, including a $38 million Series A led by Polychain Capital.
That early backing helped position Movement as one of the more closely watched Move-based blockchain projects. Its pitch combined Ethereum scaling, a newer programming model, and expectations that developers would build applications using safer smart contract infrastructure.
But the MOVE token launch in December 2024 badly damaged that momentum.
The launch was disrupted by a trading scandal involving 66 million MOVE tokens, equal to roughly 5% of total supply. Those tokens were quickly sold by an entity known as Rentech, triggering a sharp price fall and intense scrutiny over how launch supply had been handled.
The rapid sell-off shook confidence across the market. Major trading venues paused activity in response to the disorderly conditions, and Movement Labs began an internal review.
That review led to Manche’s removal and a broader reorganization of the business. The token launch, which was supposed to establish market liquidity and broaden the project’s reach, instead became the event that fractured the company’s structure.
Move Industries distances itself
After the token launch controversy, core blockchain work was moved away from Movement Labs and into Move Industries, a separate entity led by Torab Torabi.
Torabi has said Move Industries is not involved in the bankruptcy case. That statement highlights the project’s attempt to separate the active network from the financial and legal problems of the original development company.
The broader project has also changed its positioning. Rather than being framed mainly as an Ethereum Layer 2, it has been repositioned as a sovereign Layer 1 network focused on financial tools for emerging markets.
That pivot matters because it changes the story the project is trying to tell. A Layer 2 generally depends on Ethereum for settlement and security. A sovereign Layer 1 has its own independent network model and must prove it can attract users, developers, liquidity, and real economic activity on its own.
The new strategy appears to include a focus on stablecoin payments, including potential use in countries such as Ethiopia. If that plan gains real traction, it could create demand beyond speculative trading. If it fails to generate meaningful usage, the project may struggle to escape the shadow of its launch crisis.
The market damage
The MOVE token’s price collapse is the clearest sign of how severely confidence has been hit.
After reaching a quoted late-2024 high of $1.45, the token later fell to about $0.0104 after news of the bankruptcy became public. That move represents a loss of more than 99% from the quoted peak and has reduced the token’s total market value to around $45 million.
Such a decline changes the trading environment. At higher valuations, token markets often respond to product updates, ecosystem announcements, and liquidity incentives. At deeply depressed levels, they tend to become much more sensitive to legal headlines, treasury disclosures, token unlocks, and signs of forced selling.
Traders should expect sharp price swings while the market digests the bankruptcy case and the project’s restructuring. Low prices can attract short-term speculation, but they can also reflect weak confidence, thin liquidity, and uncertainty about future supply.
The key question is whether the active network can create demand that is strong enough to matter. A new corporate structure alone does not rebuild a market. Traders will be watching for evidence of real usage, especially if the project continues to promote stablecoin payments and financial infrastructure in emerging markets.
Buybacks and ecosystem promises
The Movement Foundation has begun token buyback programs intended to support the ecosystem. One of the most closely watched plans involves repurchasing 19% of the token supply that had previously been allocated to early backers.
This is an important metric for traders because it speaks directly to supply pressure. If the foundation has enough capital and follows through transparently, buybacks could help absorb selling and reduce uncertainty around large allocations. If the program is unclear, underfunded, or delayed, it may do little to change market sentiment.
Buybacks can support a token, but they do not replace product-market fit. A sustainable recovery usually requires both healthier supply dynamics and a reason for people to use the network.
The project has also promoted a newly formed ecosystem alliance. Under that arrangement, partnered projects may be expected to use up to 100% of their revenue to buy and hold the main asset.
That kind of structure could, in theory, create recurring demand for MOVE. But it depends entirely on whether those partner projects generate real revenue. Traders should look for proof of actual business activity, not only announcements. Revenue-based buying is only meaningful if the revenue exists, is measurable, and continues over time.
What the bankruptcy means now
The bankruptcy filing does not automatically mean the Movement Network will stop operating. It does, however, confirm that the original company behind the project is now dealing with serious financial stress under court supervision.
The most immediate effect is legal clarity. Movement Labs must address its remaining debts, creditor claims, and corporate obligations through the bankruptcy process. Meanwhile, the active technical effort appears to be housed elsewhere, mainly through Move Industries and related ecosystem structures.
That separation may protect the current network from being dragged directly into the old company’s restructuring. But the reputational connection remains. The same brand, token, and early history link the bankruptcy to the broader Movement ecosystem in the eyes of the market.
For now, the project faces two challenges at once. In court, Movement Labs must deal with creditors and liabilities that may reach $10 million. In the market, the active network must persuade traders, developers, and users that it can move beyond the failed launch structure and build something with durable demand.
The next phase will likely be defined by evidence rather than claims. Court filings will show how Movement Labs handles its debts. Public treasury actions will show whether buybacks are real and meaningful. Network data will show whether the pivot toward financial tools and stablecoin payments is producing actual usage.
Until those signals become clearer, MOVE is likely to remain volatile. The bankruptcy has not ended the project, but it has made the burden of proof much heavier.
For deeper context on this project’s technology and token, explore our guide: What is Movement (MOVE)?
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