Movement Labs, the company that built the Movement blockchain, has filed for Chapter 11 bankruptcy protection in Delaware, closing out one of the fastest rises and collapses of the last crypto cycle. Court records show MVMT Labs, Inc. submitted its petition on July 15, 2026 in the U.S. Bankruptcy Court for the District of Delaware, listing estimated assets of $100,001 to $500,000 against liabilities of between $1 million and $10 million. Eighteen months earlier the startup was reportedly negotiating a $100 million funding round at a $3 billion valuation. Its largest single unsecured creditor is the co-founder it fired.
A market maker is a firm paid to quote both buy and sell prices for a token so it can trade without large price gaps, an arrangement that hands the firm temporary control over part of the supply. That relationship is what broke Movement.
Key takeaways
- MVMT Labs, Inc. filed for Chapter 11 under Subchapter V on July 15, 2026 in Delaware, case number 1:26-bk-11113, before Judge Thomas M. Horan.
- The petition lists $100,001 to $500,000 in assets and $1 million to $10 million in liabilities, with several hundred creditors.
- Former co-founder and chief executive Rushikesh “Rushi” Manche, terminated in May 2025, holds the largest unsecured claim at more than $1.6 million and still owns 34.25% of the equity.
- Move Industries, the separate company now running the Movement network, says it is not part of the filing and continues to operate.
Published: July 22, 2026, 09:00 UTC
How a $3 billion valuation unraveled
Movement launched in December 2024 as an Ethereum layer-2 network using Move, the programming language Meta created for its abandoned Libra and Diem payment projects. A layer 2 is a separate network built on top of Ethereum that processes transactions faster and more cheaply before settling them on Ethereum’s main chain. The company raised roughly $38 million in a Series A led by Polychain Capital, and Reuters reported in January 2025 that it was close to a $100 million round at a $3 billion valuation. DeFiLlama puts total funding across all rounds at $141.4 million.
The trouble started within a day of the MOVE token hitting exchanges. A CoinDesk investigation published in April 2025 found that a market-making agreement routed about 66 million MOVE, roughly 5% of circulating supply, through a little-known intermediary called Rentech that appeared in contracts tied to Chinese market maker Web3Port. Wallets connected to Web3Port sold the tokens one day after the debut, generating about $38 million and crushing the price. Rentech denied misrepresenting itself.
The consequences arrived quickly. Binance banned the market-making account for what it called misconduct and froze the proceeds. Coinbase delisted MOVE. The Movement Network Foundation announced a $38 million buyback funded by recovered money and hired outside firm Groom Lake to review the deal. The Justice Department opened a grand jury investigation. Movement Labs terminated Manche in May 2025, and he later sued in the Delaware Court of Chancery to have his legal costs covered.
What the filing shows
The creditor list reads as a summary of the company’s last two years. Manche leads it with a claim above $1.6 million. The Delaware Division of Corporations is owed roughly $459,000. Crypto custodian Anchorage Digital, security auditor OtterSec and Move Industries also appear. Under Subchapter V, a streamlined track for smaller debtors, creditors have until September 14, 2026 to file proofs of claim, with a reorganization plan expected around mid-October.
Chapter 11 lets a company keep operating while it restructures debts under court supervision, though the filing signals MVMT Labs is winding down rather than rebuilding. The gap between what it raised and what it holds is the number that matters: $141.4 million in, under half a million dollars left.
The network is still running, under a different company
The bankruptcy covers one legal entity, not the blockchain. Move Industries, led by chief executive Torab Torabi, took over as the network’s primary service provider in December 2025 and says it has no involvement in the case. “Move Industries is operating normally. We continue to put our heads down and build,” Torabi wrote on X after the filing became public.
Move Industries has since converted Movement from an Ethereum layer-2 into a standalone layer-1 chain and repositioned it around stablecoin settlement and cross-border payments. Whether that pivot has traction is a separate question. DeFiLlama data shows the chain generating single-digit daily fee revenue since around November 2025, including roughly $1 across one recent 24-hour window. MOVE’s fully diluted valuation sits near $107 million, more than 99% below its peak, and the token traded around $0.0108 after the news.
What it signals for layer-2 startups
Movement is the second prominent crypto company to seek U.S. bankruptcy protection this year, after Bitcoin Depot’s Chapter 11 filing in May. The two failed differently. Bitcoin Depot blamed state rules, transaction caps and enforcement costs. Movement did not fail because of a hack or a market crash. It failed after a private contract retail buyers could not see moved 5% of the supply into a seller’s hands on day one.
That distinction matters for the argument now playing out in Washington, where the SEC is preparing its first crypto fundraising rule and the Senate is trying to finish a market structure bill before August. For now, bankruptcy courts rather than securities regulators are where crypto’s 2024 token launches get settled, a pattern also visible in the ongoing FTX creditor distributions. Movement tried a pivot to payments in June 2026. The docket suggests it came too late for the original company, even if the chain carries on under new ownership.
Frequently asked questions
Does the Chapter 11 filing shut down the Movement blockchain?
No. The petition covers MVMT Labs, Inc., the original development company. Move Industries, a separate legal entity, has run the network since December 2025 and says it is not part of the bankruptcy. The chain and the MOVE token continue to operate.
Why did Movement Labs collapse?
A market-making agreement routed roughly 66 million MOVE tokens, about 5% of supply, to an intermediary whose wallets sold them one day after the December 2024 launch for about $38 million. The resulting price crash triggered exchange bans, a Justice Department grand jury inquiry and the removal of co-founder Rushi Manche.
What happens to MOVE token holders?
Token holders are not creditors in this case and the filing does not create a claims process for them. MOVE trades near $0.0108, more than 99% below its peak, and its future depends on Move Industries rather than the bankruptcy court.
