Movement Labs Files for Chapter 11 After MOVE Token Fallout

Movement Labs filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on July 15, seeking to restructure after months of problems tied to its MOVE token and a disputed market‑making arrangement.

The company filed under Subchapter V, a streamlined reorganization route for qualifying small businesses that allows continued operations while a plan is developed under court supervision. On Monday, the court approved interim requests permitting Movement Labs to maintain bank accounts, keep its cash‑management systems active and obtain debtor‑in‑possession financing to support ongoing operations. Creditors have until Sept. 14 to file claims.

Movement Labs is the developer of the Movement Ethereum layer‑2 network. The filing follows a market‑making agreement arranged last year that transferred 66 million MOVE tokens-about 5% of the total supply-to the market maker Web3Port. Investigators reported that subsequent sales of those tokens produced roughly $38 million in downward pressure on the token’s price. The company suspended co‑founder Rushi Manche in May 2025 in connection with the deal.

Following the transaction and internal reviews, trading platforms revisited MOVE’s listing status. One major exchange suspended MOVE trading in May 2025 after determining the token no longer met its listing standards while reviews continued. Over the past year the MOVE token has fallen more than 94%, trading near $0.01 at the time of the bankruptcy filing.

Move Industries, which assumed development and operations of the Movement ecosystem in December 2025, said it is operating normally. Move Industries CEO Torab Torabi wrote on X that the bankruptcy applies only to Movement Labs and that Move Industries continues regular operations.

Court documents show the interim debtor‑in‑possession financing authorization is intended to provide liquidity while Movement Labs prepares a reorganization plan. Subchapter V provides a timeline for small‑business debtors to propose a repayment plan to creditors and aims to streamline confirmation of consensual plans. The company will remain under court supervision as it negotiates with creditors and works to file its formal plan according to the court’s schedule.

The filing reflects a period of market, operational and governance challenges for the Movement project, including the large token transfer to a market maker, token sales that coincided with sharp losses for holders, and reviews of internal controls and disclosure practices. The Chapter 11 process will determine the next steps for Movement Labs’ creditors and stakeholders.