Movement Labs files for Chapter 11 after a brutal year

Bankruptcy Filing Caps a Year of Turmoil

Movement Labs, the company behind the Move-based Ethereum layer-2 network, has filed for Chapter 11 bankruptcy, drawing a line under one of the more turbulent episodes in recent crypto history. MVMT Labs, Inc. filed for Chapter 11 in the District of Delaware on July 15, 2026 (case #26-11113). The company disclosed under 1,000 creditors, assets of between $100,000 and $500,000, and liabilities exceeding $1 million. Its largest creditors include co-founder Rushi Manche, the Delaware Division of Revenue, and Anchorage Digital.

The problems began almost immediately after the $MOVE token launched in December 2024. A market maker sold 66 million $MOVE tokens, worth approximately $38 million and roughly 2.64% of the total circulating supply at the time, on the day of the token's Binance listing. Legal counsel for the Movement Foundation had flagged the underlying contract as deeply problematic, yet the deal was approved, and within 24 hours of the December 9 debut the tokens were sold into the open market.

Scandal, Leadership Change, and a Late Pivot

Binance banned the market-making account involved in the token launch for what it described as misconduct, while Movement launched a token buyback program and hired outside firm Groom Lake to review the events surrounding the deal. The lack of transparency surrounding the deal prompted both Binance and Coinbase to take action, with Binance blacklisting the market maker and Coinbase deciding to suspend trading of the $MOVE token.

Movement Labs suspended co-founder Rushi Manche on May 2, 2025, and later announced his termination. Movement also announced that it would form a new company called Move Industries. In June, Move Industries, a separate legal entity from MVMT Labs, announced it would pivot away from competing with other Ethereum scaling networks and instead focus on cross-border payments, remittances, and stablecoin settlement. The company said it had secured access to licensed payment infrastructure in the U.S., Canada, and the European Union as it sought to build services aimed at emerging markets. The pivot proved too little, too late.

Chapter 11 allows Movement Labs to keep operating while it works through a restructuring plan, but it leaves the network, its ecosystem partnerships, and the payments strategy in an uncertain position. A second-day hearing has been scheduled for August 27, 2026.

Sources:
CoinDesk: Movement Labs files for Chapter 11 months after token scandal
BankruptcyObserver: MVMT Labs Chapter 11 case #26-11113
The Block: Movement Labs terminates co-founder Rushi Manche