Movement Labs files for bankruptcy, a year after the MOVE token scandal that started it all

Movement Labs, the development company behind the Movement blockchain ecosystem, has filed for Chapter 11 bankruptcy under the US bankruptcy code. The petition was submitted on July 15, 2026, in the US Bankruptcy Court for the District of Delaware, and became public on July 21. Court filings list the company's assets at just $100,001-500,000, with liabilities ranging from $1 million to $10 million and as many as 299 creditors.

How the Crisis Started

Back in April 2025, a CoinDesk investigation revealed that a market-making agreement had handed a little-known intermediary called Rentech 66 million MOVE tokens — about 5% of the total supply. Wallets linked to market maker Web3Port sold those tokens the day after MOVE's exchange debut, pocketing roughly $38 million. Binance banned the market maker for misconduct, and Coinbase suspended trading of the token. That $38 million was later recovered and became the basis for a MOVE buyback program launched by the Movement Network Foundation, which also hired outside firm Groom Lake to investigate the scheme.

In May 2025, the company parted ways with co-founder Rushi Manche, alleging he had signed undisclosed agreements tied to the controversial market-making deal. Manche's claim — worth more than $1.6 million — is now the largest unsecured claim in the bankruptcy case. Core development responsibility, meanwhile, moved to a newly formed entity, Move Industries, led by CEO Torab Torabi, which announced a pivot toward stablecoin payments in June 2026.

How the Market Reacted

Despite the bankruptcy headline, MOVE's price barely moved — different trackers show anywhere from roughly -3% to nearly +0.4% over 24 hours, essentially market noise rather than a crash. The token had already lost most of its value since its December 2024 launch, so news of the parent company's bankruptcy apparently didn't add much new information for holders.

One important detail: the bankruptcy was filed by the corporate entity MVMT Labs, Inc. specifically. Move Industries says the Movement blockchain's development and operations remain unaffected by the filing. The deadline for creditors to submit claims is September 14, 2026, with a reorganization plan expected around mid-October under the accelerated Subchapter V timeline.

This material is for informational purposes only and is not investment advice.