Movement Labs filed for Chapter 11 bankruptcy with assets and liabilities of no more than $500,000, which could reach $10 million after more than a year of turmoil around the MOVE token.
Summary
- Movement Labs filed for Chapter 11 with liabilities of up to $10 million.
- Rushi Manche holds its largest unsecured claim, worth more than $1.6 million.
- Move Industries claims that its operations and the development of the Movement blockchain are not affected.
Court records show MVMT Labs submitted its petition July 15 in the U.S. Bankruptcy Court for the District of Delaware. The original developer of the Movement blockchain listed between $100,001 and $500,000 in assets, up to $10 million in liabilities, and up to 299 creditors.
Former co-founder and CEO Rushikesh “Rushi” Manche has the largest unsecured claim, 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 owed $459,000.
Although she was removed from the company in May 2025, Manche still holds a 34.25% stake in Movement Labs. He previously sued the company in Delaware Chancery Court and won payment of legal fees related to a U.S. Department of Justice grand jury investigation into the launch of MOVE.
Movement Labs was originally the lead research and development company for Movement Network, which launched as layer 2 of Ethereum using the Move programming language. Meta initially developed Move for its abandoned digital currency projects Libra and Diem.
Before the symbolic controversy, Movement Labs had attracted significant venture capital funding. The company raised $38 million in a Series A round led by Polychain Capital, while Reuters reported in January 2025 that it was close to finalizing another $100 million funding round at a proposed valuation of $3 billion.
The MOVE scandal left lasting damage
Movement Labs’ problems intensified after MOVE launched on exchanges in December 2024. An investigation by CoinDesk found that a market-making agreement handed over 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 linked to market maker Web3Port sold the tokens a day after the MOVE exchange debuted and generated approximately $38 million. The sale placed a large portion of the publicly traded supply under the control of a single counterparty and contributed to a sharp decline in the token’s price.
The review also focused on the structure of the deal, as Rentech was listed in the contracts as both an agent of the Movement Foundation and an affiliate of Web3Port, CoinDesk reported. Rentech has denied misrepresenting itself, while Movement co-founder Cooper Scanlon told employees the project was examining whether he had been misled.
Reviewing the documents, crypto founder Zaki Manian argued that the conditions created incentives to increase MOVE’s valuation before selling tokens to retail traders.
“Even participating in a discussion where this is on paper is insane,” Manian told CoinDesk.
Binance later banned the market-making account for what the exchange described as misconduct and froze profits from token sales. The Movement Network Foundation subsequently announced a $38 million MOVE buyout plan using the recovered funds and hired outside firm Groom Lake to investigate the deal.
Changes in leadership followed the investigation. Movement Labs fired Manche after allegations he signed undisclosed deals, while the company transferred key development responsibilities to newly formed Move Industries under the leadership of Torab Torabi.
Trade disruptions compounded the damage. The Block reported that Binance and Coinbase suspended trading in MOVE after the launch controversy, while TradingView data cited in the original report placed MOVE at nearly $0.0108 after the bankruptcy announcement, with the token gaining less than 1%.
Move Industries remains out of the case
Move Industries has denied any involvement in the Chapter 11 case and continues to operate blockchain separately from Movement Labs. Addressing the X case, Torabi stressed that the two companies are separate legal entities.
“Move Industries is operating as normal. We continue to put our heads down and build.”
Movement Network Foundation confirmed in December 2025 that Move Industries had become the network’s main service provider and assumed its main operational tasks. Under the agreement, the foundation remains the independent steward of the network, while Move Industries manages development, operations and ecosystem work.
After the company split, Move Industries converted Movement from a layer 2 Ethereum network to an independent layer 1 network. The company has since positioned the chain as an infrastructure for stablecoin payments, cross-border transfers, and remittances in emerging markets.
Movement Labs is the second high-profile crypto company to file for U.S. bankruptcy protection in recent months. In May, Nasdaq-listed Bitcoin Depot entered Chapter 11 in the Southern District of Texas to close its crypto-ATM business and sell its assets under court supervision.
Unlike Movement Labs, Bitcoin Depot has blamed stricter state rules, lower transaction limits, litigation and coercive pressure for making its model unsustainable. The company has taken more than 9,000 kiosks offline and included its Canadian entities in the court-supervised process, according to its May 18 announcement.
