Movement Labs, the primary developer behind the Movement Ethereum Layer-2 network, has officially filed for Subchapter V Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware. The streamlined filing allows the company to maintain daily operations and secure debtor-in-possession financing under court supervision while restructuring its liabilities.
The bankruptcy follows a turbulent period stemming from the launch of its native MOVE token and a controversial market-making deal with Web3Port. The arrangement led to the suspension of co-founder Rushi Manche in May 2025 after the market maker liquidated 66 million MOVE tokens, generating approximately $38 million in downward market pressure. Following an internal review into the incident, major cryptocurrency exchanges, including Coinbase, suspended MOVE trading for failing to meet listing standards. Over the past year, MOVE has suffered a 94% price decline, trading near $0.01.
Addressing the restructuring, Move Industries CEO Torab Torabi clarified that the Chapter 11 petition applies strictly to Movement Labs. Move Industries, which assumed primary operational oversight of the Movement ecosystem in December 2025, continues to function normally. Creditors have been given until September 14, 2026, to file claims with the court.
