Movement Labs submitted a Chapter 11 bankruptcy petition on July 15, reporting up to $10 million in liabilities and assets below $500,000 after prolonged issues tied to its MOVE token.

Financial Details and Claims

The Delaware court filings show the company listed between $100,001 and $500,000 in assets and named as many as 299 creditors. Rushikesh "Rushi" Manche, former co-founder and CEO removed in May 2025, holds the largest unsecured claim exceeding $1.6 million. Despite his departure, Manche retains a 34.25% equity stake in Movement Labs.

Other claimants include the Delaware Division of Corporations, owed $459,000, along with Move Industries, Anchorage Digital, and security auditor OtterSec. Manche previously won legal expenses related to a U.S. Department of Justice grand jury investigation into the MOVE token launch.

Background and Token Controversy

Movement Labs initially acted as the main developer of the Movement blockchain, an Ethereum layer-2 project using the Move programming language developed originally by Meta for Libra and Diem. The company secured $38 million in Series A funding led by Polychain Capital and was close to raising an additional $100 million at a $3 billion valuation as of January 2025.

After MOVE tokens launched on exchanges in December 2024, controversy erupted. CoinDesk investigations revealed a market maker agreement that allocated 66 million MOVE tokens, about 5% of total supply, to Rentech, an obscure intermediary. Tokens linked to market maker Web3Port sold the allocation a day after launch, generating approximately $38 million and concentrating a significant portion of publicly traded tokens under single control, which contributed to a sharp price decline.

Questions arose over Rentech's dual role as both a Movement Foundation agent and Web3Port affiliate. Rentech denied misrepresentation, while Movement co-founder Cooper Scanlon stated the team was investigating if they had been misled.

Move Industries emphasized that its operations and development of the Movement blockchain remain unaffected by the bankruptcy filing.

This material is informational and does not constitute financial advice.