Movement Labs has filed for Chapter 11 bankruptcy with no more than $500,000 in assets and liabilities of up to $10 million following more than a year of turmoil surrounding the MOVE token.
Summary
- Movement Labs filed for Chapter 11 with debts of up to $10 million.
- Rushi Manche has its largest unsecured claim, worth more than $1.6 million.
- Move Industries says its operation and development of the Movement blockchain remains unaffected.
Court records show that MVMT Labs filed its complaint on July 15 in the US Bankruptcy Court for the District of Delaware. The original developer of the Movement blockchain has invested between $100,001 and $500,000 in assets, up to $10 million in liabilities and about 299 creditors.
Former 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 plaintiffs, with the Delaware agency allegedly owed $459,000.
Despite being removed from the company in May 2025, Manche still has a 34.25% stake in Movement Labs. He previously sued the company in the Delaware Court of Chancery and secured payment of legal fees connected to the US Department of Justice’s grand jury investigation into the launch of MOVE.
Movement Labs initially served as the main research and development company for the Movement Network, which was launched as an Ethereum layer-2 using the Move programming language. Meta initially developed Move from its abandoned Libra and Diem digital currency projects.
Before the token controversy, Movement Labs had attracted major venture funding. The company raised $38 million in a Series A round led by Polychain Capital, and Reuters reported in January 2025 that it is close to completing another $100 million round at a projected $3 billion valuation.
REMOVE the scourge that left permanent damage
Movement Labs’ problems intensified after MOVE began trading in December 2024. An investigation by CoinDesk found that a market-making agreement gave 66 million MOVE tokens, or about 5% of the supply, to a little-known intermediary called Rentech.
According to internal documents reviewed by CoinDesk, wallets connected to the market maker Web3Port sold tokens one day after the start of the MOVE exchange and generated about 38 million dollars. The sale put a large part of the public auction under the control of one company and contributed to the decrease in the value of the token.
The assessment also fell into the structure of the agreement because Rentech appeared in the contracts both as an agent of the Movement Foundation and as a Web3Port partner, CoinDesk reported. Rentech denied that it had misrepresented itself, and Movement founder Cooper Scanlon told employees that the project was investigating whether it had been misled.
Reviewing the documents, crypto founder Zaki Manian said the terms create incentives to increase the value of MOVE before selling the tokens to retailers.
“To even participate in a discussion when that’s on paper is crazy,” Manian told CoinDesk.
Binance later closed the market-making account for what the exchange described as misconduct and froze profits linked to the sale of the tokens. The Movement Network Foundation then announced a $38 million MOVE buyback plan using the proceeds and hired outside firm Groom Lake to investigate the deal.
Leadership changes followed the investigation. Movement Labs cut Manche after he allegedly signed undisclosed deals, with the company handing over development responsibilities to the newly formed Move Industries under CEO Torab Torabi.
Trade disruptions compounded the damage. Block reported that Binance and Coinbase suspended MOVE trading after the launch dispute, while TradingView data cited in the first report put MOVE near $0.0108 following the bankruptcy news, the token is gaining less than 1%.
Move Industries remains out of file
Move Industries has denied any involvement in the Chapter 11 case and continues to use blockchain separately from Movement Labs. Speaking at X, Torabi emphasized that the two companies are separate legal entities.
“Move Industries is operating normally. We continue to keep our heads down.”
The Movement Network Foundation confirmed in December 2025 that Move Industries has become the main service provider of the network and started its main operational activities. Under that plan, the foundation remains the independent network manager, while Move Industries handles development, operations and ecosystem work.
Following the demerger, Move Industries transitioned Movement from an Ethereum layer-2 to an independent layer-1 network. The company has since positioned the chain as an infrastructure for stablecoin payments, cross-border transfers and remittances to emerging markets.
Movement Labs is the second prominent crypto company to seek US bankruptcy protection in recent months. In May, Nasdaq-listed Bitcoin Depot filed for Chapter 11 in the Southern District of Texas to shut down its crypto ATM business and sell its assets under court supervision.
Unlike Movement Labs, Bitcoin Depot blames strict national regulations, low transaction limits, litigation and enforcement pressure for making its model unsustainable. The company took more than 9,000 kiosks offline and put its Canadian affiliates in a court-monitored program, according to its May 18 announcement.
