Movement Labs Files Chapter 11 After MOVE Token Scandal
MVMT Labs filed for bankruptcy in Delaware with $500K in assets, up to $10M in liabilities and 299 creditors. What the collapse means for low-float altcoin traders.
$500K in Assets Against $10M in Claims
MVMT Labs, the original developer of the Movement blockchain, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware on July 15. The filing only surfaced publicly on July 21. The numbers leave little room for interpretation: assets of between $100,001 and $500,000, liabilities of up to $10 million, and as many as 299 creditors.
The largest unsecured claim belongs to co-founder Rushi Manche at more than $1.6 million — the same executive the company terminated in May 2025 over allegedly undisclosed agreements. He still holds a 34.25% equity stake. The Delaware Division of Corporations is listed at roughly $459,000, alongside Anchorage Digital and security auditor OtterSec.
The 66 Million Token Problem
This traces back to December 2024. A market-making agreement routed 66 million MOVE — about 5% of supply — to a little-known intermediary called Rentech. Wallets tied to Chinese market maker Web3Port dumped those tokens a single day after the exchange debut, clearing roughly $38 million. Binance banned the account involved and froze the proceeds. The Movement Network Foundation launched a $38 million buyback and hired Groom Lake to review the deal. A DOJ grand jury investigation into the launch is still running.
Before all that, Movement was a funding darling: a $38 million Series A led by Polychain, and a near-closed $100 million round at a reported $3 billion valuation, per Reuters. What is left is half a million dollars.
What Traders Should Take From This
Move Industries, run by CEO Torab Torabi, sits outside the filing. Torabi said the two are distinct legal entities and that Move Industries continues to operate normally. The chain has since been rebuilt from an Ethereum L2 into a standalone L1 aimed at stablecoin payments and cross-border remittances. Under Subchapter V, a restructuring plan is due by October 13.
Price-wise, the filing barely registered. MOVE trades near $0.0108, a hair above its $0.0104 all-time low, and gained less than 1% on the day the news broke. That is the signal — the market wrote this token off months ago, down 94% over the year. Movement is now the second high-profile crypto firm in U.S. bankruptcy in a matter of months, after Bitcoin Depot in May. For anyone trading low-float alts, the lesson is uncomfortable and repeatable: the dilution never shows up in the chart, it sits in the market-maker contract, and by the time it prints, the supply has already been sold.