Movement Labs files for Chapter 11 bankruptcy after months of MOVE token turmoil

Movement Labs, the developer behind the Movement Ethereum layer-2 blockchain, filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware on July 15, 2026. The filing was made under Subchapter V, which is designed for streamlined reorganization processes for qualifying small businesses. This status allows Movement Labs to continue operating under court supervision as it restructures. The court has approved interim motions for Movement Labs to maintain its bank accounts, cash management systems, and receive debtor-in-possession financing to support ongoing operations. Creditors have until September 14 to submit claims.

The bankruptcy comes after a series of difficulties connected to the launch and trading of the MOVE token. In May 2025, Movement Labs suspended its co-founder, Rushi Manche, following revelations about a controversial market-making deal he arranged with Web3Port. The agreement gave Web3Port 66 million MOVE tokens, about 5% of the total supply, which were subsequently sold, reportedly causing around $38 million in downward price pressure. This incident triggered an independent investigation and led Coinbase to suspend trading of MOVE due to the token no longer meeting its listing standards.

The MOVE token has suffered a significant decline, dropping by more than 94% over the past year to approximately $0.01. Despite the bankruptcy filing of Movement Labs, Torab Torabi, CEO of Move Industries— which took over development and operations of the Movement ecosystem from Movement Labs in December 2025—clarified that the bankruptcy only applies to Movement Labs. Move Industries continues to operate normally. This filing marks a continuation of the turmoil surrounding the project and highlights the financial distress following the token controversy and market setbacks.