Storj Labs has voluntarily filed for Chapter 11 bankruptcy protection in the United States, saying the process is intended to address legacy financial obligations while allowing the company to continue operating.

The case was filed on July 26 in the U.S. Bankruptcy Court for the Northern District of West Virginia. Storj said it expects business operations to continue as normal and does not anticipate interruptions to customer services during the restructuring process. Chapter 11 typically allows a company to keep operating while it seeks court approval for a plan to reorganize debts and other obligations.

The filing comes after approximately $35 million in fundraising and as Storj continues to focus on its core decentralized cloud storage business. The company is also reviewing prior acquisitions and operations it considers non-essential as part of an effort to streamline the business.

Storj executives characterized the Chapter 11 filing as a restructuring initiative rather than a shutdown. Kaloyan Raev, Director of Software Engineering, said the underlying business remains strong but has been burdened by legacy obligations.

“This process lets us resolve them in an orderly way and come out the other side with a clean foundation,” Raev said.

Storj said the restructuring could ultimately allow management, the decentralized community, token holders, and potential investors to share ownership of the reorganized business. Following the news, the Storj price was down 9.7%, trading at $0.066.

WEMIX Stablecoin Hit by $6.25 Million Smart Contract Exploit

In a separate development, WEMIX, the blockchain platform operated by Wemade, confirmed a security breach involving its WEMIX stablecoin.

The incident reportedly took place at around 6:18 p.m. on July 26, after the owner authority of a smart contract connected to WEMIX was compromised. In smart contract systems, owner privileges can be used to perform administrative functions, which makes the security of those permissions a critical part of token operations. The breach allegedly enabled approximately $6.25 million worth of abnormal WEMIX tokens to be issued and transferred on-chain.

WEMIX said it has identified addresses believed to be associated with the attack and is tracking the movement of the assets.

Investigation and Response Continue

The company said it is working with major cryptocurrency exchanges and blockchain security firms to monitor the movement of the stolen funds. It may also cooperate with law enforcement agencies if needed.

WEMIX said it will provide further details and response measures as the investigation continues. Users have been urged to rely only on official announcements and to avoid unverified information or speculation related to the exploit.