The deadly winter. After raising $38 million and aiming to become a major crypto infrastructure of the Ethereum ecosystemMovement Labs is filing for Chapter 11 protection. MVMT Labs, the historic entity behind the Movement blockchain, now has up to $10 million in debt for less than $500,000 in assets.
The key points of this article:The deadly winter hit Movement Labs, which filed for Chapter 11 protection after racking up as much as $10 million in debt for less than $500,000 in assets.
The fall of Movement Labs was marked by turmoil around the MOVE token, whose value fell by 99%, and by sanctions from trading platforms like Binance and Coinbase.
Up to $10 million in debt for Movement Labs
MVMT Labs’ voluntary petition was filed in the Delaware Bankruptcy Court under File No. 26-11113. The company opted for subchapter V of chapter 11, a simplified procedure allowing small companies to continue their activity while restructuring their debts. The filing lists 200 to 999 creditors, although detailed documents list as many as 299. Rushi Manche, ousted co-founder of the crypto project, holds the largest unsecured claim, greater than $1.6 million. This would mainly correspond to the reimbursement of legal costs linked to an investigation by a grand jury of the American Department of Justice. Despite his departure, Manche still owns 34.25% of MVMT Labs. Co-founder Cooper Scanlon owns 65.75%. A meeting of creditors is scheduled on August 20, while reimbursement requests must be submitted before September 14.
The fall of Movement Labs makes the headlines in the specialist press – Source: Compte
From the controversial launch of the crypto project to the 99% fall of MOVE
This bankruptcy comes after more than a year of turbulence around the MOVE token. Shortly after its launch in December 2024, a controversial market-making agreement would have allowed a counterparty to sell 66 million tokens, or around 5% of the total supply, the day after they were placed on the market. The contracts notably involved the intermediary Rentech and the market maker Web3Port. Rentech, however, denied any deception or misconduct. Binance subsequently banned the affected market-making account for misconduct and froze a portion of its earnings. Coinbase, for its part, suspended MOVE exchanges. Movement Labs launched a token buyback program and commissioned Groom Lake to investigate the deal. Rushi Manche was suspended, then dismissed in May 2025, before hiring legal proceedings against the company. The project was then resumed by distinct structuresincluding Move Industries. It has abandoned the head-on race for second-layer Ethereum solutions to focus on cross-border payments, money transfers and stablecoin settlement. MOVE is now trading around $0.01, up from an all-time high of $1.45 in December 2024. Its capitalization is around $45 million, while Movement retains around $133 million in value locked. The bankruptcy only concerns MVMT Labs and therefore does not automatically lead to the shutdown of the blockchain. Move Industries claims to be operating normally and not to be part of the procedure. Its consequences on the network, its partnerships and its pivot towards payments nevertheless remain uncertain. The crypto winter will leave its mark.