Storj Files for Chapter 11 Bankruptcy — Token Craters 16%

Storj Labs, the company behind the decentralized cloud storage network that pays users to lease unused disk space instead of relying on traditional data centers, filed for Chapter 11 bankruptcy on July 26 in the U.S. Bankruptcy Court for the Northern District of West Virginia. This is a voluntary restructuring of legacy debt, not a shutdown, CoinDesk reports.

• The STORJ token dropped 16% to roughly $0.06 — down 79% over the past year and 98% from its all-time high of $3.81 set in March 2021.
• The filing extends a rough week for crypto: Movement Labs filed for bankruptcy on July 21, BitMEX announced its shutdown on July 23, and BitMart announced its wind-down on July 26.
• The company says the service will keep running as normal, with no disruption for customers throughout the process.

This is a decisive, positive step. The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter.

"This is a decisive, positive step. The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter," said Kaloyan Raev, Storj's director of software engineering, in the company's official press release.

Under the restructuring plan, token holders will get an ownership stake in the reorganized company alongside management and investors — a rare outcome, since token holders typically get nothing in a Chapter 11 case. Storj joins a growing list of crypto providers that didn't survive this particular week: BitMEX, which is closing on September 23, among them.

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