Movement Labs files for Chapter 11 bankruptcy months after token scandal

Movement Labs, the developer behind the Movement blockchain, has filed for Chapter 11 bankruptcy following a series of challenges over the past year. The company’s Movement blockchain, an Ethereum layer-2 network utilizing the Move programming language, faced significant scrutiny after the launch of its MOVE token in December 2025. A market-making agreement resulted in the rapid sale of 66 million MOVE tokens by a single counterparty, which contributed to a sharp decline in the token's market price and subsequent investigations.

The controversy mainly involved Rentech, an intermediary linked to a Chinese market maker, Web3Port. Internal documents indicated Movement's executives were uncertain whether the foundation believed Rentech was affiliated with Web3Port, which it was not. Rentech denied any wrongdoing. Binance responded to the incident by banning the market-making account involved for misconduct. Movement Labs subsequently initiated a token buyback program and hired an external firm to review the events.

In an effort to overcome its troubles, Movement Labs pivoted in June 2026 from focusing on Ethereum scaling to emphasizing cross-border payments, remittances, and stablecoin settlements. The company claimed to have gained access to licensed payment infrastructure across the U.S., Canada, and the EU, targeting services for emerging markets. This strategic shift mirrored a broader trend in the layer-2 blockchain sector toward real-world financial use cases amid intense competition.

The Chapter 11 bankruptcy filing puts Movement Labs' future plans in doubt. While the company may continue operations during restructuring, the impact of the filing on its blockchain network, partnerships, and payments expansion remains uncertain according to the report. The bankruptcy process will involve court supervision as the company seeks to manage its debts and potentially reorganize its business.