Movement Labs Files for Chapter 11 Bankruptcy After $141M Raise and Token Collapse

Movement Labs has filed for Chapter 11 insolvency protection in the U.S. Bankruptcy Court of Delaware, capping months of turmoil triggered by a token scandal. The filing reveals the company has under 1,000 creditors, assets between $100,000 and $500,000, and liabilities exceeding $1 million. The largest unsecured claim, worth over $1.6 million, belongs to former co-founder Ruhikesh Manche. Other major creditors include the Delaware Division of Revenue and Anchorage Digital.

The project’s troubles began in December 2024 with the launch of its MOVE token. Shortly after its debut on Binance, approximately $66 million worth of tokens were dumped onto the market as part of a market-making deal with Rentech. The sudden supply surge caused the token’s price to plummet, wiping out billions in value within days. Binance later banned Rentech for misconduct, accusing it of selling the entire stash one day after the listing while placing few buy orders. Rentech reportedly earned $38 million in profit before being removed from the exchange on March 18.

In response, Movement launched a token buyback program to repurchase MOVE tokens and restore liquidity. It also hired Groom Lake to review the Rentech deal, which uncovered ties to Chinese market maker Web3Port, ultimately leading to Manche’s dismissal. The first creditor hearing is scheduled for August 20.

Despite raising a total of $141.4 million across several funding rounds—including a Series A led by Polychain Capital—the network’s on-chain activity tells a starkly different story. DeFiLlama data shows daily app revenue has been under $800 since November 2025, and chain fees have remained in the single digits for months, with the last 24 hours generating just $8.

MOVE hit a new all-time low on July 20, falling from about $0.041 in January to $0.01043. At press time, it had recovered less than 2%, representing a decline of over 99% from its all-time high of $1.45, according to CoinGecko. The network’s total value locked (TVL) sits at roughly $133 million.

Originally designed to link blockchains built on Move language with Ethereum, the layer-2 network announced in June that it would pivot toward cross-border payments, remittances, and dollar-saving products.

Source: https://cryptopotato.com/141m-fundraise-to-8-daily-fees-movement-labs-files-for-bankruptcy/