Movement Labs, the developer of the Ethereum Layer 2 blockchain Movement, filed for Chapter 11 bankruptcy protection with the U.S. District Bankruptcy Court for the District of Delaware on July 15, using the simplified reorganization process under Subchapter V for eligible small businesses. After the filing, the company can reorganize and continue operating under court supervision. Over the past year, the MOVE token has fallen by more than 94% and is currently around $0.01.
Details of the Chapter 11 Bankruptcy Filing: Filed on July 15
According to court records, Movement Labs filed for Chapter 11 bankruptcy protection with the U.S. District Bankruptcy Court for the District of Delaware on July 15, 2026, applying the simplified reorganization process for small businesses under Subchapter V. The company can continue operating and reorganize under court supervision.
On Monday, July 21, 2026, the court approved Movement Labs’ interim application, as follows:
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Keep bank accounts and cash management systems
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Obtain DIP (debtor-in-possession) financing during the period of bankruptcy protection to maintain day-to-day operations
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Creditors’ claims deadline: September 14, 2026
Timeline of the MOVE Token Market Maker Scandal
Movement Labs’ financial crisis is directly linked to the dispute involving MOVE token market makers. The event timeline is as follows: In May 2025, Movement Labs suspended co-founder Rushi Manche due to his key involvement in facilitating a transaction with the market maker Web3Port. Web3Port received 66 million MOVE tokens (about 5% of the token supply) and subsequently sold them. Reports said this caused approximately $38 million in downward price pressure and triggered an independent investigation.
Later that same month, Coinbase paused trading of the MOVE token, citing that it no longer met listing requirements, while the review of the market-maker arrangements was still ongoing. Over the past year, the MOVE token has fallen by more than 94%, and at the time of the report it was about $0.01.
Move Industries Statement: Bankruptcy Applies Only to Movement Labs
After the bankruptcy filing was submitted, Torab Torabi, CEO of Move Industries, posted on X stating that this bankruptcy filing applies only to Movement Labs itself. He added that Move Industries took over development and operations of the Movement ecosystem from Movement Labs in December 2025, and it is still operating normally and is not directly affected by Movement Labs’ bankruptcy proceedings.
FAQ
Which chapter of bankruptcy protection did Movement Labs file, and when?
Movement Labs filed for Chapter 11 bankruptcy protection with the U.S. District Bankruptcy Court for the District of Delaware on July 15, 2026, applying the simplified reorganization process for eligible small businesses under Subchapter V. The court approved the company’s interim motion on Monday, July 21, 2026.
Does this bankruptcy affect Move Industries and the Movement ecosystem?
According to a statement on X by Torab Torabi, CEO of Move Industries, this bankruptcy filing applies only to Movement Labs. Move Industries took over development and operations of the Movement ecosystem from Movement Labs in December 2025 and is still operating normally.
What is the MOVE token market maker scandal, and how did it affect Movement Labs?
In May 2025, market maker Web3Port received 66 million MOVE tokens (about 5% of the supply) and sold them. Reports said this caused about $38 million in downward price pressure and triggered an independent investigation. Subsequently, co-founder Rushi Manche was suspended, and Coinbase paused MOVE token trading later that month. Over the past year, the MOVE token has fallen by more than 94% and is currently around $0.01.
