Movement Labs has filed for Chapter 11 bankruptcy with no more than $500,000 in assets and liabilities that could reach $10 million after more than a year of turmoil surrounding the MOVE token.
Summary
- Movement Labs filed for Chapter 11 with up to $10 million in liabilities.
- Rushi Manche has his largest unsecured claim, valued at more than $1.6 million.
- Move Industries says its operations and the development of the Movement blockchain are not affected.
Court files show that MVMT Labs filed its petition on July 15 in the U.S. Bankruptcy Court for the District of Delaware. The original developer of the Movement blockchain listed between $100,001 and $500,000 in assets, up to $10 million in liabilities, and up to 299 creditors.
Former co-founder and CEO Rushikesh “Rushi” Manche has the largest unsecured claim at more than $1.6 million, according to the filing. The document also names the Delaware Division of Corporations, Move Industries, Anchorage Digital and security auditor OtterSec among the claimants, and the Delaware agency is allegedly owed $459,000.
Despite being removed from the company in May 2025, Manche still owns a 34.25% equity stake in Movement Labs. He previously sued the company in the Delaware Court of Chancery and obtained payment for legal fees related to a US Department of Justice grand jury investigation into the launch of MOVE.
Movement Labs originally served as the primary research and development company for Movement Network, which launched as a layer 2 of Ethereum using the Move programming language. Meta initially developed Move for its abandoned digital currency projects Libra and Diem.
Before the token controversy, Movement Labs had attracted significant venture funding. The company raised $38 million in a Series A round led by Polychain Capital, while Reuters reported in January 2025 that it was close to completing another $100 million round at a proposed valuation of $3 billion.
The MOVE scandal left lasting damage
Movement Labs’ troubles intensified after MOVE debuted on exchanges in December 2024. A CoinDesk investigation found that a market-making deal delivered 66 million MOVE tokens, or about 5% of the supply, to a little-known broker called Rentech.
According to internal documents reviewed by CoinDesk, wallets linked to market maker Web3Port sold the tokens a day after MOVE’s exchange debut and generated around $38 million. The sale placed a large portion of the publicly traded supply under the control of a counterparty and contributed to a sharp drop in the token’s price.
Scrutiny also fell on the structure of the deal because Rentech appeared in the contracts as an agent of the Movement Foundation and as an affiliate of Web3Port, CoinDesk reported. Rentech denied misrepresenting its identity, while Movement co-founder Cooper Scanlon told employees the project was examining whether they had been misled.
Reviewing the documents, crypto founder Zaki Manian argued that the terms created incentives to increase MOVE’s valuation before selling tokens to retail traders.
“Even participating in a discussion where that is on paper is crazy,” Manian told CoinDesk.
Binance subsequently banned the market making account for what the exchange described as misconduct and froze profits linked to token sales. The Movement Network Foundation subsequently announced a $38 million MOVE buyback plan using the recovered funds and hired outside firm Groom Lake to investigate the deal.
Leadership changes followed the investigation. Movement Labs fired Manche after alleging that he had signed undisclosed deals, while the company transferred core development responsibilities to the newly formed Move Industries under CEO Torab Torabi.
Business disruptions compounded the damage. The Block reported that Binance and Coinbase suspended MOVE trading after the launch controversy, while TradingView data cited in the original report placed MOVE near $0.0108 following the bankruptcy news, with the token gaining less than 1%.
Move Industries is left out of the presentation
Move Industries has denied any involvement in the Chapter 11 case and continues to operate the blockchain separately from Movement Labs. Addressing X’s filing, Torabi emphasized that the two companies are distinct legal entities.
“Move Industries is operating normally. We continue to keep our heads down and build.”
Movement Network Foundation confirmed in December 2025 that Move Industries had become the network’s primary service provider and assumed its primary operational functions. Under that agreement, the foundation remains the independent network administrator, while Move Industries handles development, operations and ecosystem work.
Following the corporate separation, Move Industries converted Movement from an Ethereum Layer 2 to an independent Layer 1 network. The company has since positioned the chain as infrastructure for stablecoin payments, cross-border transfers, and remittances in emerging markets.
Movement Labs is the second prominent crypto company to seek bankruptcy protection in the US in recent months. In May, Bitcoin Depot Lists on Nasdaq entered chapter 11 in the Southern District of Texas to close its crypto ATM business and sell its assets under court supervision.
Unlike Movement Labs, Bitcoin Depot blamed stricter state rules, lower transaction limits, litigation, and law enforcement pressure for making its model unsustainable. The company took more than 9,000 kiosks offline and included its Canadian entities in the court-supervised process, according to its May 18 announcement.
