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Movement Labs files for Chapter 11 bankruptcy after months of MOVE token turmoil
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- DeepHorus
Movement Labs, the developer behind the Movement Ethereum layer-2 blockchain, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware, according to court records. The petition, filed July 15 under Subchapter V, enables the company to continue operating while restructuring under court supervision. This streamlined process is designed for qualifying small businesses seeking reorganization.
The filing caps months of turmoil tied to the launch of Movement’s MOVE token and a controversial market-making agreement. Movement Labs suspended co-founder Rushi Manche in May 2025 over a deal he helped broker with Web3Port. The market maker received 66 million MOVE, about 5% of the token’s supply, and later sold the holdings, creating roughly $38 million in downward price pressure.
An independent investigation was launched into the arrangement. Shortly after, Coinbase suspended MOVE trading, stating the token no longer met its listing standards. The MOVE token has since fallen more than 94% over the past year to approximately $0.01, according to CoinGecko data.
On Monday, the court approved interim requests allowing Movement Labs to maintain its bank accounts and cash management systems, and to obtain debtor-in-possession financing to fund operations during the bankruptcy process. Creditors have until September 14 to file claims against the company.
Following the filing, Move Industries CEO Torab Torabi wrote on X that the bankruptcy applies only to Movement Labs. Move Industries, which took over development and operations of the Movement ecosystem from Movement Labs in December 2025, continues to operate normally, according to Torabi. He emphasized that the restructuring should not affect the broader ecosystem.
The bankruptcy highlights the risks associated with market-making arrangements in the crypto industry. While Movement Labs seeks to reorganize its debts and operations, the future of the MOVE token remains uncertain. The company will continue its development work under court supervision, focusing on resolving financial obligations and restoring investor confidence.
