--- title: "Movement Labs files for Chapter 11 as the MOVE token scandal reaches its end" description: "The company behind the MOVE token filed for bankruptcy in Delaware on July 15, disclosing under $500,000 in assets against more than $1 million in debts. It is the formal end of a startup undone by a market-making deal that dumped 5% of its token supply days after launch. The blockchain it built keeps running under separate ownership." category: "Crypto" category_url: https://boursel.com/category/crypto author: "Rafael Ortiz" published: 2026-07-21T22:12:04.000Z updated: 2026-07-21T22:12:04.000Z canonical: https://boursel.com/article/movement-labs-files-for-chapter-11-as-the-move-token-scandal-reaches-its-end tags: ["bankruptcy", "move-token", "ethereum", "layer-2", "crypto"] --- # Movement Labs files for Chapter 11 as the MOVE token scandal reaches its end The company behind the MOVE token filed for bankruptcy in Delaware on July 15, disclosing under $500,000 in assets against more than $1 million in debts. It is the formal end of a startup undone by a market-making deal that dumped 5% of its token supply days after launch. The blockchain it built keeps running under separate ownership. Movement Labs, the startup that built the MOVE token and an associated blockchain network, has filed for bankruptcy, closing out one of the more damaging governance scandals in recent crypto history. The company [filed for Chapter 11 protection in the US Bankruptcy Court for the District of Delaware on July 15](https://cointelegraph.com/news/movement-labs-files-chapter-11-bankruptcy-move-token-turmoil), using Subchapter V, a streamlined track designed for smaller businesses. ## A small filing for a company that raised big The numbers in the filing are strikingly modest for a project that once carried real ambitions. In its petition, Movement Labs reported [somewhere between $100,000 and $500,000 in assets against more than $1 million in liabilities](https://www.coindesk.com/policy/2026/07/21/movement-labs-files-for-chapter-11-months-after-token-scandal-and-strategic-overhaul), and fewer than 1,000 creditors. Among the named creditors are co-founder Rushi Manche, the Delaware Division of Revenue, and the crypto custody firm Anchorage Digital. A Subchapter V filing at that scale is the profile of a company that has already been hollowed out, not one entering bankruptcy at the height of its operations. By the time the petition was filed, most of what made Movement Labs valuable had either collapsed in price or moved to a different entity. ## The deal that started the unraveling The origin of the crisis was a market-making arrangement that went badly wrong. A firm called Web3Port received [about 66 million MOVE tokens, roughly 5% of the supply, and sold them into the market one day after the token began trading](https://www.coindesk.com/policy/2026/07/21/movement-labs-files-for-chapter-11-months-after-token-scandal-and-strategic-overhaul). Market makers are normally hired to provide liquidity and smooth trading; here, the effect was the opposite, a wall of sell pressure that Cointelegraph reported amounted to roughly $38 million hitting the price almost immediately. When [CoinDesk investigated the arrangement in April 2025](https://www.coindesk.com/policy/2026/07/21/movement-labs-files-for-chapter-11-months-after-token-scandal-and-strategic-overhaul), the disclosure set off a chain reaction. Binance banned the market-making account involved over the conduct, and the terms of the deal, opaque to the community that had bought the token, became a credibility problem the project never recovered from. ## Leadership and listings fell away The fallout hit the company's people and its market access in quick succession. Movement Labs [suspended co-founder Rushi Manche in May 2025](https://cointelegraph.com/news/movement-labs-files-chapter-11-bankruptcy-move-token-turmoil) over his role in the Web3Port arrangement. In the same month, Coinbase suspended trading in MOVE after concluding the token no longer met its listing standards, cutting off one of the largest venues where ordinary investors could buy or sell it. The price told the rest of the story. MOVE has [fallen more than 94% over the past year to roughly $0.01](https://cointelegraph.com/news/movement-labs-files-chapter-11-bankruptcy-move-token-turmoil). A buyback program the company launched did nothing to arrest the decline, and by the time of the filing the token traded with little liquidity and little practical use. ## The network survives, the company does not One important distinction runs through this story: the bankruptcy is of Movement Labs, not of the technology it created. Development and operations of the Movement ecosystem [passed to a separate entity, Move Industries, in December 2025](https://cointelegraph.com/news/movement-labs-files-chapter-11-bankruptcy-move-token-turmoil), which has said the network continues to run normally and has redirected its focus toward stablecoin and payments infrastructure rather than competing purely as a blockchain scaling platform. So the Chapter 11 filing does not switch off the chain. It winds down the original corporate vehicle, while the project itself carries on under new stewardship and a narrower mission. For holders of MOVE, that is cold comfort: a near-worthless token, a bankrupt issuer, and an uncertain path to recovering anything through the court process. ## Why it matters Movement Labs is a case study in how a token launch can destroy trust faster than any technical failure. The damage did not come from a hack or a bug, but from a distribution deal that put a large slug of supply into a seller's hands and was not clearly disclosed to the people buying the token. Once that came to light, no amount of buyback spending or reorganization could rebuild the credibility the project had lost. For crypto investors, the lesson is in the fine print of tokenomics. Who holds the supply, on what terms, and with what lockups is not a footnote; it is often the whole risk. Movement's blockchain may yet find a second life under Move Industries, but the token that was supposed to represent it has become a near-total loss, and the company that issued it is now the property of a bankruptcy court. ## Sources - [Movement Labs Files for Chapter 11 Months After Token Scandal and Strategic Overhaul](https://www.coindesk.com/policy/2026/07/21/movement-labs-files-for-chapter-11-months-after-token-scandal-and-strategic-overhaul) - [Movement Labs files Chapter 11 bankruptcy amid MOVE token turmoil](https://cointelegraph.com/news/movement-labs-files-chapter-11-bankruptcy-move-token-turmoil)