Storj files Chapter 11, asks court to let tokenholders join the equity queue 📂

Decentralized cloud storage provider Storj Labs has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Northern District of West Virginia, the company said Sunday. Storj stated that ordinary operations and customer services will continue during the restructuring, subject to court oversight, while its parent company, Inveniam, continues to support the business. In an open letter to its community, Storj said its liabilities largely predate its current strategy and are too substantial to resolve through business growth alone, adding that the network continues to operate normally and that the STORJ token's utility is unchanged. The token showed no significant immediate price reaction, trading around $0.072 at the time of writing, according to CoinGecko.

Management said it intends to propose a mechanism allowing STORJ tokenholders to participate in the reorganized company's equity, though the company has not disclosed how eligibility would be determined, whether participation would involve a token snapshot or lockup, or how much equity might be allocated. Storj acknowledged that any plan must follow bankruptcy priorities and receive court approval. Cointelegraph reached out to Storj for comment but did not receive a response before publication.

Founded in 2014 as an open-source peer-to-peer cloud storage project, Storj is among the crypto industry's longest-running decentralized infrastructure initiatives and lets users rent storage from other network participants rather than rely on centralized providers. The filing comes in a month that has already seen other crypto companies seek court protection: Movement Labs filed under Subchapter V on July 15 after months of turmoil linked to its MOVE token, while Bitcoin mining pool Poolin filed on July 22 as it pursued a court-supervised sale of two Texas mining sites. Derivatives exchange BitMEX separately announced in July that it would shut down after 11 years, opting for an orderly wind-down rather than a bankruptcy filing.