Movement Labs, the original development company behind the Movement blockchain, has filed for Chapter 11 bankruptcy — and the financial wreckage it left behind tells a story that goes far beyond a routine corporate restructuring. The Movement Labs bankruptcy petition, filed July 15 in the US Bankruptcy Court for the District of Delaware under Subchapter V, is the formal endpoint of a collapse that began almost the moment the MOVE token launched.
Key takeaways
- Movement Labs filed for Chapter 11 bankruptcy under Subchapter V on July 15 in Delaware, reporting assets between $100,001 and $500,000 and liabilities of up to $10 million.
- The largest unsecured creditor is suspended co-founder Rushi Manche, with a claim exceeding $1.6 million, despite retaining a 34.25% equity stake in the company.
- A market-making deal with Web3Port allowed 66 million MOVE tokens to be sold into the market, creating roughly $38 million in downward price pressure.
- The MOVE token has fallen more than 94% over the past year to approximately $0.01; Coinbase suspended trading after it no longer met listing standards.
- Move Industries, a separate legal entity that took over ecosystem operations in December 2025, continues to operate normally.
The bankruptcy filing and what it reveals
Movement Labs reported assets between $100,001 and $500,000 against liabilities of up to $10 million, with up to 299 creditors listed in the filing. That balance sheet tells you everything about the severity of the company’s financial deterioration.
The largest unsecured claim belongs to co-founder Rushikesh “Rushi” Manche — the same person whose suspension triggered the chain of events leading here — at over $1.6 million. Manche, who retains a 34.25% equity stake in Movement Labs despite his termination, had previously sued the company in Delaware Chancery Court and won advancement of legal fees related to a DOJ grand jury investigation. Other creditors named include the Delaware Division of Revenue and Anchorage Digital, according to CoinDesk.
The Subchapter V filing is significant. It’s a streamlined reorganization track reserved for qualifying small businesses, allowing Movement Labs to continue operating under court supervision while it works through its debts. The court has already approved interim requests permitting the company to maintain its bank accounts, cash management systems, and access debtor-in-possession financing to fund operations. Creditors have until September 14 to file claims against the company.
The MOVE token market-making scandal
To understand the bankruptcy, you have to go back to the token launch. The Movement blockchain — an Ethereum layer-2 network built using the Move programming language, originally developed at Meta — debuted the MOVE token in December 2024. What followed was one of the more damaging market-making controversies in recent crypto history.
The Web3Port deal and token dumping
An April 2025 CoinDesk investigation found Movement was examining whether it had been misled into a market-making agreement that handed a single counterparty unusual influence over MOVE’s circulating supply. The arrangement — which involved Rentech, a little-known intermediary connected to Chinese market maker Web3Port — allowed 66 million MOVE tokens, approximately 5% of total supply, to be sold into the market just one day after the token debuted. The sell-off reportedly created roughly $38 million in downward price pressure and triggered an independent investigation. Rentech denied any wrongdoing or misrepresentation.
Suspension of co-founder Rushi Manche
Movement Labs suspended co-founder Rushi Manche in May 2025 over his role in brokering the Web3Port deal. He was subsequently terminated. The fallout extended beyond Movement itself: Binance banned the market-making account involved in the token launch for what it described as misconduct. Movement also launched a token buyback program and hired outside firm Groom Lake to review the circumstances of the deal.
The irony that Manche is now the company’s largest unsecured creditor — with a $1.6 million claim against the very organization that terminated him — underscores how legally complicated the collapse has become.
Exchange suspension and price collapse
Coinbase suspended MOVE token trading in May 2025 after determining the token no longer met its listing standards during the ongoing review. The market never recovered. The MOVE token has fallen more than 94% over the past year to roughly $0.01. For holders who bought during or after the launch period, that number represents near-total loss of value.
Move Industries steps in — and keeps the lights on
The most practically important distinction right now is the legal separation between Movement Labs, the bankrupt entity, and Move Industries, the company that took over development and operations of the Movement ecosystem in December 2025. The two are distinct legal entities, and Move Industries CEO Torab Torabi confirmed on X that the bankruptcy applies only to MVMT Labs.
Move Industries had already begun repositioning the project before the bankruptcy was filed. In June, the company announced a strategic pivot away from competing in the crowded Ethereum scaling sector, shifting its focus instead toward cross-border payments, remittances, and stablecoin settlement. Move Industries said it had secured access to licensed payment infrastructure in the US, Canada, and the European Union, aiming to build financial services for emerging markets.
That pivot reflects a broader shift happening across the layer-2 sector, where the race to scale Ethereum has become intensely competitive and the differentiation between networks increasingly difficult to communicate. Repositioning toward real-world financial infrastructure is a defensible long-term play — but it also represents an acknowledgment that the original thesis for Movement’s launch has not played out as hoped.
What the bankruptcy means for the broader ecosystem
The Movement Labs bankruptcy carries implications beyond one company’s balance sheet. It’s a stark illustration of how quickly a crypto project can move from well-funded ambition to insolvency when a token launch scandal erodes institutional trust, exchange relationships, and community confidence simultaneously.
With Move Industries now holding the operational keys and pursuing a payments-focused strategy, the underlying network isn’t dead. But the legal and reputational overhang — an ongoing DOJ grand jury investigation, unresolved creditor claims, a suspended token on major exchanges — creates a challenging environment for rebuilding user and developer confidence. The creditor deadline of September 14 will be the next meaningful milestone in understanding just how deep the financial exposure runs.
FAQ
Why did Movement Labs file for Chapter 11 bankruptcy?
Movement Labs filed for Chapter 11 bankruptcy following months of turmoil stemming from the MOVE token launch, including a controversial market-making scandal that caused significant token price decline and triggered investigations and exchange suspensions.
What role does Move Industries have after Movement Labs’ bankruptcy filing?
Move Industries, a separate legal entity, took over development and operations of the Movement ecosystem from Movement Labs in December 2025 and continues to operate normally. The bankruptcy applies only to Movement Labs, not to Move Industries.
What caused the MOVE token price to collapse?
A market-making agreement with Web3Port, brokered through intermediary Rentech, allowed 66 million MOVE tokens to be sold into the market shortly after the token launched, creating approximately $38 million in downward price pressure. The resulting scandal led to investigations, exchange suspensions, and a sustained loss of market confidence that drove the token down more than 94% over the following year.
Is the MOVE token still trading on major exchanges?
No. Coinbase suspended MOVE token trading in May 2025 after determining it no longer met the exchange’s listing standards, amid the ongoing review into the market-making arrangement.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.