Movement Labs, the company that originally developed the Movement blockchain, has entered Chapter 11 bankruptcy proceedings in the United States, adding another development to a project that has faced months of controversy and operational pressure.

The filing is significant because it separates the legal and financial restructuring of MVMT Labs from the technical status of the Movement network, while also putting creditor claims and remaining company obligations under court supervision.

Movement Labs Begins Chapter 11 Restructuring

Court filings show that MVMT Labs voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The company intends to restructure under Subchapter V, a process designed for relatively small businesses that can continue operating while debts are addressed through the court.

The filing lists assets valued between $100,000 and $1 million and between 200 and 999 creditors. Liabilities are estimated at between $1 million and $10 million. An initial creditors’ meeting is scheduled for August 20, and creditors have until September 14 to file claims.

The bankruptcy follows months of financial and operational strain that reshaped the Movement ecosystem. In crypto projects, corporate bankruptcy can affect employees, vendors, grants and commercial agreements even when the underlying blockchain software or token continues to exist outside the debtor company.

MOVE Token Controversy Led to Months of Turmoil

Movement Labs’ difficulties intensified after the launch of its MOVE token in late 2024.

The project came under scrutiny over concerns about a market-making arrangement involving a counterparty known to Web3Port and intermediary Rentech, which was said to have had significant influence over MOVE’s circulating supply. As previously reported, internal records indicated that about 66 million MOVE tokens were sold into the market shortly after issuance, contributing to the token’s steep decline.

Market-making agreements are commonly used by token projects to support exchange liquidity, but they can become controversial when token control, sales rights or disclosure practices are questioned. In Movement’s case, the dispute became a central issue for the project because it involved early circulating supply and exchange-market activity soon after the token launch.

The controversy extended beyond Movement Labs itself. Binance removed the market maker involved, alleging unethical conduct. Movement also began a token buyback program and ordered an independent investigation into the arrangement.

The project also underwent major leadership changes. In 2025, co-founder Rushi Manche left Movement Labs during the controversy, adding further uncertainty to the organization’s restructuring effort.

Blockchain Development Continues Despite Bankruptcy

The Chapter 11 filing does not mean the Movement blockchain itself is shutting down.

As part of the broader restructuring, core development has already been transferred to Move Industries, a separate legal entity. The company has been repositioning the ecosystem away from direct competition with Ethereum layer-2 networks and toward cross-border payments, remittances and stablecoin settlement.

That shift followed an announcement by blockchain company Move Industries in March that it would bring payment infrastructure to the United States, Canada and the European Union. The strategy moved the project away from competing primarily at the infrastructure layer and toward real-world financial applications, an area where blockchain projects often emphasize settlement speed, stablecoin rails and integrations with regulated payment corridors.

Still, questions remain about how the bankruptcy process may affect existing partnerships, ecosystem funding and commercial expansion. The next court milestones, including the creditors’ meeting and claims deadline, will help define which obligations remain with MVMT Labs and how the restructured ecosystem proceeds.