Movement Labs, the developer behind the Movement blockchain, officially filed for Chapter 11 bankruptcy on July 15 in Delaware, reporting assets below $500,000 against debts estimated up to $10 million. The filing caps a rapid financial collapse that began shortly after the MOVE token launch.
Financial Breakdown and Creditors
The bankruptcy petition lists approximately 299 creditors, with the largest unsecured claim exceeding $1.6 million held by suspended co-founder Rushikesh "Rushi" Manche. Manche retains a 34.25% equity stake despite suspension and had previously won a legal battle to recover costs linked to a DOJ grand jury investigation. Other creditors include the Delaware Division of Revenue and Anchorage Digital.
Movement Labs utilized Subchapter V provisions, a reorganization track for small businesses, which allows court-monitored operation during debt resolution. The court has granted temporary approvals for the company to keep control over bank accounts, cash flow, and debtor-in-possession financing. Creditors are allowed to submit claims until September 14.
Market-Making Controversy and Token Collapse
The catalyst for financial distress traces back to a market-making agreement with Web3Port that enabled 66 million MOVE tokens to flood the market. This move imposed approximately $38 million in downward selling pressure, driving the token price down over 94% within a year to around $0.01. Coinbase has since suspended MOVE trading after delisting due to failure to meet exchange criteria.
Move Industries, a legally distinct entity that assumed ecosystem functions in December 2025, continues normal operations unaffected by the bankruptcy.
According to CoinDesk, these developments expose deep operational and financial vulnerabilities triggered after the launch of the Movement blockchain as an Ethereum layer-2 solution built on the Move programming language.
This information is provided for informational purposes and does not constitute financial advice.
