Movement Labs Files Chapter 11 Bankruptcy as Move Industries Distances Itself

Movement Labs, the original developer behind the Move blockchain, has filed for Chapter 11 bankruptcy in the United States, marking another major chapter in the project’s turbulent history. The filing follows months of controversy surrounding the MOVE token, governance issues, and a restructuring that shifted control of the blockchain ecosystem.

According to court documents, Movement Labs filed for Chapter 11 protection last week, reporting assets of up to $500,000 and liabilities exceeding $1 million. Among the listed creditors is former co-founder and CEO Rushi Manche, who exited the company last year after internal disputes.

The bankruptcy comes after a series of high-profile incidents involving the MOVE token. Earlier, the company faced allegations that it had promised 10% of the token’s total supply to early insiders, fueling criticism and contributing to a sharp decline in the token’s value.

Another major controversy centered on a market-making agreement involving 66 million MOVE tokens that were reportedly sold shortly after launch. Binance later banned the market maker involved and froze the associated profits, using the recovered funds to compensate affected users. Following the incident, Movement Labs announced an internal investigation and pledged to conduct MOVE token buybacks.

The restructuring of the ecosystem also resulted in Move Industries assuming responsibility for the Move blockchain. During the transition, Movement Labs officially terminated Manche, citing undisclosed agreements that allegedly violated company policies.

Responding to concerns over the bankruptcy, Move Industries CEO Torab stated on X that Movement Labs and Move Industries are separate legal entities. He emphasized that Move Industries is not involved in the bankruptcy proceedings and continues normal operations.

Torab added that the company remains focused on developing the Move blockchain, which was recently transitioned from an Ethereum Layer-2 network into an independent Layer-1 blockchain. The project is now positioning itself as a settlement layer for stablecoin payments in emerging markets.

Despite the bankruptcy filing, the MOVE token showed little reaction. At the time of writing, MOVE was trading around $0.0108, up less than 1% over the previous 24 hours, according to TradingView data.