Decentralized cloud storage provider Storj Labs has filed for Chapter 11 bankruptcy protection, saying it intends to keep its network operating while it restructures legacy liabilities and explores a possible ownership path for STORJ tokenholders.

Storj said on Sunday that it filed a voluntary case in the US Bankruptcy Court for the Northern District of West Virginia. In an official announcement, the company said ordinary business operations and customer services are expected to continue during the court-supervised process, subject to bankruptcy court oversight. Storj also said its parent company, Inveniam, would continue supporting the business.

Chapter 11 allows a company to seek protection from creditors while it proposes a reorganization plan, but major transactions and any final restructuring plan remain subject to court approval. For crypto companies, that process can be especially complex when a business has both traditional corporate creditors and a token community whose rights may differ from those of shareholders or creditors.

The restructuring may become an unusual case for the crypto sector because Storj is exploring whether holders of a utility token can participate in ownership of a company emerging from bankruptcy.

In an open letter to the Storj token community, the company said its liabilities largely predate its current business strategy and are too large to address through business growth alone. Storj said the network continues to operate normally and that the utility of the STORJ token remains unchanged.

STORJ showed no significant immediate price reaction after the announcement and was trading around $0.072 at the time of writing, according to CoinGecko.

Storj considers tokenholder equity participation

Storj said its management plans to propose a mechanism that would allow tokenholders to participate in the equity of the reorganized company.

The company has not disclosed how eligibility for tokenholders would be determined, whether participation would require a token snapshot or lockup, or how much equity could be allocated. Storj acknowledged that any restructuring plan must comply with bankruptcy priorities and receive court approval.

That leaves several details for the court process to clarify, including how any proposed tokenholder participation would fit within creditor claims, existing ownership interests and securities-law requirements. Until a plan is filed and approved, the proposal remains only a potential path rather than a confirmed recovery or distribution.

Cointelegraph said it contacted Storj for comment but did not receive a response before publication.

Storj is one of the crypto industry’s longest-running decentralized infrastructure projects. It began in 2014 as an open-source peer-to-peer cloud storage project designed to let users rent storage from other network participants instead of relying on centralized providers.

Storj’s bankruptcy filing came in the same month that at least two other crypto companies sought Chapter 11 protection.

Movement Labs filed under Subchapter V on July 15 after months of turmoil tied to its MOVE token. Bitcoin mining pool Poolin filed on July 22 while pursuing a court-supervised sale of two mining sites in Texas.

BitMEX also announced in July that it would shut down after 11 years. BitMart said it would end trading on Aug. 26 and cease operations entirely on Jan. 31, 2027. Neither exchange announced a bankruptcy filing; both chose orderly wind-downs instead.