Movement Labs has filed for Chapter 11 bankruptcy with no more than $500,000 in assets and liabilities that could reach $10 million after more than a year of turmoil over the MOVE token.
summary
- Movement Labs has filed for Chapter 11 with liabilities of up to $10 million.
- Rushi Manche holds the largest unsecured claim at more than $1.6 million.
- Move Industries says its operations and Blockchain movement development have not been affected.
court Records It appears that MVMT Labs filed its petition on July 15 in the U.S. Bankruptcy Court for the District of Delaware. The original developer of the Movement blockchain listed assets worth between $100,001 and $500,000, up to $10 million in liabilities and up to 299 creditors.
Former co-founder and CEO Rushikesh “Roshi” Manch has the largest unsecured claim at 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 claimants, with the Delaware agency allegedly owed $459,000.
Despite being exited from the company in May 2025, Munch still owns a 34.25% stake in Movement Labs. He previously sued the company in Delaware Court of Chancery and obtained payment for legal expenses associated with the US Department of Justice’s grand jury investigation into the launch of MOVE.
Movement Labs was originally the main R&D company for the Movement Network, which was launched as an Ethereum-2 layer using the Move programming language. Meta initially developed Move for the abandoned Libra and Diem cryptocurrency projects.
Before the token controversy, Movement Labs had attracted significant funding for the project. 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 completing another $100 million round at a proposed valuation of $3 billion.
The MOVE scandal left lasting damage
Movement Labs’ problems intensified after MOVE debuted on exchanges in December 2024. An investigation by CoinDesk found that the market-making agreement delivered 66 million MOVE tokens, or about 5% of the supply, to an unknown broker called Rentech.
According to internal documents reviewed by CoinDesk, wallets linked to market maker Web3Port sold tokens one day after the MOVE platform debuted and generated about $38 million. The sale placed a significant share of the publicly traded supply under the control of one of the counterparties and contributed to a sharp decline in the price of the token.
CoinDesk reported that the audit also included the agreement structure because Rentech appeared in the contracts as an agent for the Movement Foundation and as an affiliate of Web3Port. Rentech denied misrepresenting itself, while Cooper Scanlon, co-founder of the movement, told staff the project was examining whether it had been misled.
Reviewing the documents, cryptocurrency founder Zaki Manian argued that the terms created incentives to raise MOVE’s valuation before selling the tokens to retail traders.
“Even participating in a discussion that is on paper is crazy,” Manian told CoinDesk.
Binance later banned the market-making account for what the exchange called misconduct and froze profits associated with token sales. The Movement Network Foundation later announced a $38 million MOVE buyback plan using the recovered funds and hired outside firm Groom Lake to investigate the agreement.
Leadership changes followed the investigation. Movement Labs terminated Manche after allegedly signing undisclosed agreements, while the company transferred core development responsibilities to the newly formed Move Industries under CEO Torab Torabi.
Trade disruptions exacerbated the damage. The Block reported that Binance and Coinbase suspended MOVE trading following controversy over the launch, while TradingView data cited in the original report put MOVE near $0.0108 following the bankruptcy news, with the token gaining less than 1%.
Move Industries remains off the record
Move Industries has denied any involvement in the Chapter 11 case and continues to operate the blockchain separately from Movement Labs. Speaking about the X file, Al-Turabi confirmed that the two companies are separate legal entities.
“Move Industries is operating normally. We continue to work and build.”
The Move Network Foundation confirmed in December 2025 that Move Industries had become the primary service provider for the network and assumed key operating duties. Under this arrangement, the Foundation remains the independent network administrator, while Move Industries handles development, operations and ecosystem work.
After the company split, Move Industries transitioned Move from Ethereum layer 2 to an independent layer 1 network. Since then, the company has positioned the chain as an infrastructure for stablecoin payments, cross-border transfers, and remittances in emerging markets.
Movement Labs is the second prominent cryptocurrency company to file for bankruptcy protection in the United States in recent months. In May, Bitcoin Depot was listed on the Nasdaq I entered class 11 in the Southern District of Texas to shut down its cryptocurrency ATM business and sell its assets under court supervision.
Unlike Movement Labs, Bitcoin Depot blamed stricter state rules, lower transaction limits, litigation, and enforcement pressures for making its model unsustainable. The company shut down more than 9,000 kiosks and included its Canadian entities in the court-supervised process, according to its report. Announcement May 18.
