Movement Labs Files for Bankruptcy Amid MOVE Token Turmoil

Movement Labs, the developer behind the Movement Ethereum layer-2 blockchain, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware. This move comes after months of turmoil tied to the launch of its MOVE token and a controversial market-making agreement.

The petition was filed July 15 under Subchapter V, a streamlined reorganization process for qualifying small businesses. Movement Labs will continue operating while it restructures under court supervision, with creditors having until September 14 to file claims.

A market-making scandal rocked the project after co-founder Rushi Manche was suspended in May 2025 over his involvement in a deal that saw Web3Port receive 66 million MOVE tokens. The token's price plummeted as a result of the deal, with some $38 million in downward pressure reportedly created.

The bankruptcy follows a prolonged decline of the MOVE token, which has fallen more than 94% over the past year to roughly $0.01. Move Industries CEO Torab Torabi wrote on X that the bankruptcy applies only to Movement Labs and does not affect his company's operations.