Movement Labs Files for Chapter 11 After MOVE Token Loses 94% of Its Value 💀

Movement Labs, the original developer behind the Movement Ethereum layer-2 blockchain, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on July 15, according to court records. The petition was filed under Subchapter V, a streamlined reorganization process for qualifying small businesses, allowing the company to continue operating while it restructures under court supervision.

Court filings show the firm listed assets of up to $500,000 and liabilities exceeding $1 million. Creditors include co-founder and former CEO Rushi Manche, who left the company last year. 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 Sept. 14 to file claims.

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.

The bankruptcy follows months of turmoil tied to the launch of the MOVE token and a controversial market-making agreement. Movement Labs suspended 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, reportedly creating roughly $38 million in downward price pressure and prompting an independent investigation. Binance banned the market maker and froze the profits, while Coinbase suspended MOVE trading later that month after determining the token no longer met its listing standards. Earlier allegations also claimed Movement Labs had promised 10% of its MOVE token supply to early insiders, contributing to a sharp decline at the time.

MOVE is trading flat amid a broader crypto market rally. The token has fallen more than 94% over the past year to roughly $0.01, according to CoinGecko.