Storj files for bankruptcy, explores equity path for tokenholders The decentralized storage provider says its network will continue operating during Chapter 11 as it explores a court-approved ownership mechanism for STORJ holders.
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Storj Labs, a decentralized cloud storage provider, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Northern District of West Virginia. Despite the filing, Storj plans to keep its network operational and maintain normal customer services throughout the restructuring process. The company's parent, Inveniam, will continue supporting the business during this period. Storj explained that its liabilities mostly predate its current strategy and are too large to be resolved through business growth alone, though the network's operation and the utility of its STORJ token remain unchanged.
A notable aspect of Storj’s bankruptcy filing is its plan to explore an ownership structure that allows STORJ tokenholders to participate in the reorganized company’s equity. However, Storj has yet to disclose details about how tokenholder eligibility would be determined, whether a token snapshot or lockup would be used, or the amount of equity that might be allocated. Any such plan must comply with bankruptcy priorities and obtain court approval, making this a potentially unusual test case for utility-token holders gaining ownership rights during bankruptcy restructuring.
Storj is one of the longest-running decentralized infrastructure projects in the crypto industry, having started in 2014 as an open-source peer-to-peer cloud storage network designed to enable users to rent storage space from others instead of centralized providers. The filing comes amid a wave of recent crypto industry bankruptcies or shutdown announcements, including Movement Labs and Poolin also filing for Chapter 11 protection in July, while BitMEX and BitMart announced shutdowns or winding-down plans without filing for bankruptcy. Storj’s token price showed little immediate reaction following the announcement.