Movement Labs, the company behind the Movement blockchain, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware, becoming the latest cryptocurrency startup to face severe financial distress. The filing follows months of governance conflicts, controversy surrounding its MOVE token launch, and an unsuccessful strategic transition that weighed heavily on the company’s operations.
The San Francisco-based blockchain developer has filed under Subchapter V, a streamlined Chapter 11 process designed for small businesses. The filing allows the company to continue operating while restructuring its debts under the supervision of the bankruptcy court, according to a CoinDesk report.
Movement Labs Reports More Than $1 Million in Liabilities
Court filings reveal that Movement Labs has fewer than 1,000 creditors. The company estimated its assets to be between $100,000 and $500,000, while its liabilities exceed $1 million, highlighting the financial strain it is currently facing.
Among the company’s largest creditors listed in the filing are co-founder Rushi Manche, the Delaware Division of Revenue, and Anchorage Digital.
MOVE Token Launch Triggered Financial Crisis
The company’s financial troubles can largely be traced back to the launch of its MOVE token in December 2024.
Movement was originally developed as an Ethereum Layer 2 blockchain built using Meta’s Move programming language. However, shortly after the token’s debut, the project came under intense scrutiny following a controversial market-making agreement.
The agreement enabled the sale of 66 million MOVE tokens just one day after the token began trading. The arrangement involved intermediary Rentech and market maker Web3Port, and the massive token sale contributed to a sharp decline in the token’s market value.
The incident sparked internal investigations and raised questions about how the agreement had been structured.
Movement executives later indicated they believed they may have been misled regarding the relationship between Rentech and Web3Port. However, Rentech denied any wrongdoing, rejecting the allegations.
Binance Ban Deepened the Crisis
The controversy intensified after Binance banned the market-making account associated with the MOVE token incident, citing alleged misconduct.
In response, Movement Labs introduced a token buyback programme in an effort to restore market confidence and appointed independent investigation firm Groom Lake to conduct a review of the events surrounding the token launch.
Leadership changes followed soon after. Co-founder Rushi Manche departed the company in May 2025 and subsequently filed a lawsuit against Movement Labs in Delaware, according to CoinDesk.
Strategic Pivot Failed to Ease Concerns
In June 2026, a separate legal entity known as Move Industries announced a major strategic shift for the project.
Rather than continuing to compete as an Ethereum Layer 2 blockchain, the company said it would focus on cross-border payments, international remittances, and stablecoin settlement services across the United States, Canada, and the European Union.
The move was intended to reposition the business toward payment infrastructure and financial services, but the latest bankruptcy filing has cast fresh uncertainty over the future of the project.
Future of Movement Blockchain Remains Uncertain
With Movement Labs now undergoing court-supervised restructuring, questions remain about the long-term future of the blockchain network, its commercial partnerships, and its payments-focused strategy.
The Chapter 11 filing represents another significant setback for the cryptocurrency sector, underscoring the challenges blockchain startups continue to face when governance issues, token economics, and market confidence come under pressure.