Storj Labs has filed for Chapter 11 bankruptcy protection after raising about $35 million through venture funding, grants and its 2017 STORJ token sale, while saying its decentralized cloud storage services will continue operating.

The company filed the case on July 26 in the U.S. Bankruptcy Court for the Northern District of West Virginia under case number 5:26-bk-00512. According to Storj’s official restructuring announcement, the Chapter 11 process is intended to address older financial obligations while allowing the decentralized cloud storage company to keep operating.

Chapter 11 generally allows a company to seek protection from creditors while it proposes a plan to reorganize, repay or restructure obligations under court supervision. For Storj, that means the filing does not automatically end operations, but key financing, asset-sale and reorganization steps can become subject to creditor review and court approval.

Storj said its customer services, network and main business would continue during the court-supervised process, subject to bankruptcy rules and court approval. The company also said token utility and network operations remained unchanged, although STORJ fell after the filing.

Storj plans to propose a shared-ownership structure involving management, investors, community members and STORJ holders. The proposal has not yet been finalized and would need to be included in a formal Chapter 11 plan.

Storj says filing targets legacy debt

Storj described the bankruptcy case as a restructuring rather than a shutdown. The company said it intends to continue normal operations while working through debts tied to an earlier stage of the business. Its announcement did not provide a complete list of assets, liabilities or creditors.

Kaloyan Raev, Storj’s director of software engineering, said the business was “strong and right-sized” but remained constrained by “legacy obligations from an earlier chapter.” The statement reflects Storj’s position, while the bankruptcy court will still review the company’s finances, creditor claims and any proposed reorganization plan.

Storj also said it has narrowed its strategy to its core cloud business. As part of that process, the company is disposing of earlier acquisitions and non-essential operations. Inveniam supports the restructuring and said Storj should refocus on distributed storage, compute and file-access services.

Inveniam announced an agreement to acquire Storj in October 2025. At the time, the companies said Storj would remain a separate legal entity and operate as an Inveniam subsidiary. They also said existing customer, supplier and community relationships would remain in place.

Services expected to continue through Chapter 11

Storj said it “does not anticipate any interruptions” to customer services during the bankruptcy process. The statement is an expectation rather than a guarantee. The company must continue complying with bankruptcy law, and some business decisions may require court approval.

The Storj network relies on independent storage providers that contribute unused storage capacity. Customers can access distributed cloud storage through tools designed to work with common business systems. The STORJ token supports payments across parts of the network, including compensation for node operators that provide storage and bandwidth.

Storj’s official website continued to advertise cloud storage, file access and compute products after the filing. The company has not announced changes to the token’s role in the network. However, the bankruptcy case concerns Storj Labs as a company, and the court process may affect its ownership, finances and business structure.

That distinction is important for decentralized infrastructure projects, where a network, token and operating company can have different legal and economic roles. Storj’s statements address network utility and customer service continuity, while the bankruptcy docket will determine how the company’s corporate obligations are handled.

Before the filing, Storj had also changed parts of its cloud storage business. The company announced new storage and egress prices that took effect on July 1, 2026, while maintaining separate terms for some customers on older plans.

Token holders may be included in ownership proposal

Storj said management, community members, STORJ holders, current investors and possible new investors could share ownership of the reorganized company. The announcement described the idea as a plan, not a completed arrangement. It did not state how many token holders could qualify or how ownership would be allocated.

Any such ownership proposal would need to appear in a formal Chapter 11 plan and receive the required creditor support and court approval. Storj has not disclosed conversion terms, eligibility rules, valuation details or a timetable. As a result, holding STORJ does not currently provide a confirmed right to shares in the reorganized business.

The proposed structure differs from the court-supervised asset-sale approach used by some other crypto companies. As crypto.news reported, Poolin entered Chapter 11 while pursuing a sale of its Texas bitcoin mining assets. The mining company reported about $173.1 million in obligations before filing.

Movement Labs also filed for Chapter 11 in July with liabilities that could reach $10 million. A separate developer said work on the Movement blockchain would continue despite the original company’s bankruptcy case.

Storj raised about $35 million before bankruptcy filing

Storj completed a $30 million STORJ token sale in May 2017. The sale reached its target in seven days, although the company had initially scheduled it to remain open until June 19. Participants received STORJ tokens that could be used within the storage ecosystem.

The company also raised traditional funding before and around the token sale. Storj announced a $3 million seed round in February 2017 to support development of its distributed cloud storage platform. The round included investors linked to Qualcomm Ventures and Techstars.

CB Insights funding data places Storj’s total equity funding at about $5.05 million across six rounds. Combined with the token sale, the publicly reported amount reaches roughly $35 million.

Inveniam’s October 2025 acquisition announcement said Storj would retain its existing services, leadership and community relationships. It also said the STORJ token would remain part of the company’s decentralized infrastructure.

The Chapter 11 filing came about nine months after that acquisition announcement. Storj has not yet released a full reorganization plan, a detailed creditor schedule or final ownership terms. Future court filings are expected to provide more information about its debts, available financing, asset sales and the proposed role for token holders.