Movement Labs Files Chapter 11 Bankruptcy After MOVE Token Controversy

Movement Labs filed for Chapter 11 bankruptcy in Delaware after months of turmoil tied to its MOVE token, including a controversial market-making deal, a co-founder suspension and Coinbase’s delisting of the token.

Movement Labs Files Chapter 11 Bankruptcy After MOVE Token Controversy

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Written by

Nate Kostar

staff writer

Reviewed by

Sam Bourgi

staff writer

Written by

Nate Kostar

staff writer

Reviewed by

Sam Bourgi

staff writer

Movement Labs files for Chapter 11 bankruptcy after months of MOVE token turmoil

Latest News

Published

Jul 21, 2026

The blockchain developer will continue operating under court supervision as it restructures following a market-making scandal, a co-founder’s suspension, and exchange delistings that rocked the project.

Movement Labs, the developer behind the Movement Ethereum layer-2 blockchain, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware, according to court records.

The petition was

filed

July 15 under Subchapter V, a streamlined reorganization process for qualifying small businesses. The filing allows the company to continue operating while it restructures under court supervision.

On Monday, the court approved interim requests allowing Movement Labs to maintain its bank accounts and cash management systems and 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.

Source:

Torab

Market-making scandal rocked Movement before bankruptcy

The filing follows months of turmoil tied to the launch of Movement’s MOVE token and a controversial market-making agreement.

Movement Labs

suspended co-founder 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.

Coinbase

suspended MOVE trading

later that month after determining the token no longer met its listing standards, as the review into the market-making arrangement continued.

The bankruptcy follows a prolonged decline of the MOVE token, which has fallen more than 94% over the past year to roughly $0.01.

MOVE token price over the past year. Source:

CoinGecko

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