MVMT Labs Inc., the company known as Movement Labs, filed for Chapter 11 bankruptcy protection in Delaware on July 15, months after the project came under scrutiny over a scandal involving its MOVE token. The filing puts the company's restructuring under court supervision while allowing it to continue operating as it works through a repayment plan.

The bankruptcy petition listed assets of between $100,001 and $500,000, while estimated liabilities ranged from $1 million to $10 million. The U.S. Bankruptcy Court for the District of Delaware registered the case as 26-11113-TMH, with Bankruptcy Judge Thomas M. Horan assigned to the matter. The filing is proceeding under the Subchapter V small-business process, a streamlined Chapter 11 track designed for smaller companies to reorganize without the full cost and procedural burden of a traditional bankruptcy.

Movement Labs originally developed Movement, an Ethereum Layer 2 network launched in 2024. The network was designed to bring Move-based smart contracts into the Ethereum ecosystem. The Move programming language originated at Meta as part of its abandoned Diem blockchain project and has since been adopted by several Layer 1 and Layer 2 networks.

Co-founder Listed as Largest Unsecured Creditor

According to the bankruptcy filing, Movement Labs may have as many as 299 creditors. Co-founder Rushikesh “Rushi” Manche is listed as holding the largest unsecured claim, at more than $1.6 million.

Manche was removed from Movement Labs after the project's 2024 token controversy. One of the firm's market makers dumped 66 million MOVE tokens the day after the token's launch in December 2024. Market makers are firms contracted to provide liquidity and orderly trading for newly launched tokens, making the alleged dump a breach of the role's intended function. The incident pushed the token down from its peak price of $1.45, and several exchanges also delisted MOVE in response.

A Coindesk investigation in April 2025 reported that Movement Labs was examining the incident and assessing whether the firm had been misled. Although Manche was terminated, he reportedly retained a 34.5% equity stake in the company. He also has a separate case against Movement Labs in the Delaware Chancery Court.

Move Industries Says It Is Not Affected

Move Industries, a separate company formed in May 2025 by other members of the Movement Labs team, has sought to distance itself from the bankruptcy filing.

Move Industries CEO Torab Torabi said on X that the firm continues to operate normally and is not affected by the proceeding. “MVMT labs filing for bankruptcy impacts us the same way Tesla filing for bankruptcy would impact us….not at all,” he said.

Move Industries has described itself as the steward of the Move ecosystem and recently announced a shift toward payments, cross-border remittances, and stablecoin settlement. In June, the company said it had secured access to licensed infrastructure that would allow it to offer those services in the US, Canada, and Europe.

Torabi said the plan remains unchanged, adding that he had recently returned from East Africa, where he met with the Ethiopian central bank to discuss stablecoin adoption.

The MOVE token showed only a slight price drop following the bankruptcy filing. However, it has declined over the past year and is down 68% year to date. At $0.01075, MOVE is 99% below its peak price of $1.45. The bankruptcy raises questions about how MVMT Labs' remaining assets and any ongoing obligations will be administered, and whether the Delaware court will oversee any resolution of the disputes involving Manche's equity stake and unsecured claim.