# Movement Labs files Chapter 11 after MOVE scandal > MVMT Labs (Movement Labs) filed Chapter 11 in Delaware with under $500K in assets against up to $10M in liabilities after the 2025 MOVE market-making scandal. - **Source:** https://ptycoin.com/en/posts/2026-07-23-movement-labs-chapter-11-bankruptcy/ - **Published:** 2026-07-23 - **Category:** News - **Author:** Mateo - **Tags:** ethereum, defi, corporate, security, exchanges, self-custody --- **MVMT Labs, Inc.**, the company known as **Movement Labs**, filed for **Chapter 11** bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on **July 15, 2026**, court records show. The petition lists assets of roughly **$100,001–$500,000**, liabilities of **$1–10 million**, and between **200 and 999** creditors. The case (docketed as **26-11113**, Judge Thomas M. Horan) was reported this week by [CoinDesk](https://www.coindesk.com/policy/2026/07/21/movement-labs-files-for-chapter-11-months-after-token-scandal-and-strategic-overhaul) and [The Defiant](https://thedefiant.io/news/blockchains/movement-labs-files-for-chapter-11-bankruptcy), with the [PACER Monitor docket](https://www.pacermonitor.com/public/case/65708680/MVMT_Labs,_Inc) as the primary filing trail. Creditors have until **September 14** to file proofs of claim; a meeting of creditors is on the calendar for **August 20**. ## What Chapter 11 means here Chapter 11 is a U.S. reorganization process: the company keeps operating under court supervision while it tries to restructure debts, rather than immediately liquidating. Movement Labs filed under **Subchapter V**, the streamlined small-business track of Chapter 11. On **July 20**, the court approved interim steps that let the debtor keep its bank accounts and cash-management system and obtain **debtor-in-possession (DIP)** financing so it can fund day-to-day operations during the case, [Cointelegraph](https://www.tradingview.com/news/cointelegraph:14b1a9a8e094b:0-movement-labs-files-for-chapter-11-bankruptcy-after-months-of-move-token-turmoil/) and [ForkLog](https://forklog.com/en/movement-labs-files-for-chapter-11-bankruptcy/) report. A reorganization plan is expected on the Subchapter V timeline (ForkLog cites an **October 13** plan deadline). None of that is a guarantee that unsecured creditors, token holders, or counterparties will be made whole. It is a court process with a limited asset base. ## Creditors and the balance sheet gap The filing’s asset and liability ranges leave a wide hole between what the company says it holds and what it may owe. Reporting based on the petition names former co-founder **Rushikesh “Rushi” Manche** as the largest unsecured claimant, with a claim of more than **$1.6 million**. Other names that appear among claimants in coverage include the **Delaware Division of Revenue**, crypto custodian **Anchorage Digital**, security auditor **OtterSec**, and **Move Industries** itself ([crypto.news](https://crypto.news/movement-labs-collapses-into-bankruptcy-token-scandals/), CoinDesk via The Defiant). For a project that once raised tens of millions and rode a high-profile **MOVE** token launch, the gap between fundraising history and the petition’s low six-figure asset range is the hard number readers should sit with. Raised capital is not the same as assets left for creditors years later. ## The MOVE launch scandal that never left the tape Movement built an **Ethereum** layer-2 (later pivoted toward a standalone **M1** layer-1 story under the foundation stack) using the **Move** language originally developed at Meta for the shelved Diem project. The **MOVE** token launched in **December 2024**. Trouble hit soon after. An April 2025 [CoinDesk investigation](https://www.coindesk.com/tech/2025/04/30/inside-movement-s-token-dump-scandal-secret-contracts-shadow-advisors-and-hidden-middlemen) reported that a market-making arrangement allowed **66 million MOVE** tokens (about **5%** of supply) to be sold into the market the day after launch, contributing to a sharp price drop. The documents focused on intermediary **Rentech** and Chinese market maker **Web3Port**; Rentech denied wrongdoing. **Binance** banned the market-making account tied to the launch. Movement opened an internal review, hired investigators, and later cut ties with Manche (**suspended May 2, 2025; terminated May 7**). **Coinbase** suspended MOVE trading around **May 15, 2025**, saying the asset no longer met listing standards. MOVE recently traded near **$0.01**, about **94%** lower over the past year and roughly **99%** below its December 2024 all-time high near **$1.45**, according to market data cited by The Defiant and Cointelegraph. Chain TVL still sat near **$133 million** on [DeFiLlama](https://defillama.com/chain/movement) around the filing window, which is a reminder that *network activity* and *developer-company solvency* are different ledgers. ## Move Industries says the chain work continues This is the detail holders and builders need first: the bankruptcy petition is for **MVMT Labs, Inc.**, not automatically for every entity that ever touched the Movement brand. In **December 2025**, **Move Industries** became the primary service provider for the Movement Network Foundation and took over day-to-day development and ops. After the filing news, Move Industries CEO **Torab Torabi** stated on X that Move Industries is a **separate legal entity**, is **not part of the Chapter 11 case**, and is **operating normally** (quoted in [ForkLog](https://forklog.com/en/movement-labs-files-for-chapter-11-bankruptcy/) and [Cointelegraph](https://www.tradingview.com/news/cointelegraph:14b1a9a8e094b:0-movement-labs-files-for-chapter-11-bankruptcy-after-months-of-move-token-turmoil/)). Treat that as a claim from the successor operator, not as court-approved insulation of every asset, token, or contract. Corporate graphs in crypto often look simple in a tweet and complicated in a docket. The petition still lists Move Industries among interested parties in some reporting; separation of legal entities does not by itself make token economics risk-free. ## What token holders should (and should not) assume Chapter 11 restructures a **company’s** balance sheet. A publicly traded **token** is usually not equity in that company. Holding MOVE does not, by default, put you in the same queue as a scheduled unsecured creditor unless a court order or plan says otherwise. That is cold comfort when the token is already down ~99% from the launch spike, but it is the legal structure. Practical takeaways for anyone who still touches the stack: - **Verify entity risk.** Wallet apps, bridges, and “official” sites can rebrand while the original lab entity dies in court. Check which legal name signs terms of service and which one filed. - **Self-custody still only protects keys you control.** It does not protect you from a token that trades thin, loses major exchange listings, or is tied to a failed launch market-maker deal. - **Watch the docket, not the Discord hype.** Proof-of-claim deadline (**Sept. 14**), the **Aug. 20** creditors’ meeting, DIP lender terms, and any plan that tries to sell IP or settle founder claims matter more than a recovery narrative. For LatAm readers who followed Move-language chains as the “next Ethereum L2” pitch, the lesson is the same one that shows up after every high-FDV launch gone wrong: marketing velocity is not a balance sheet. Prefer products where you can name the operator, the custody model, and the exit path before you size a position. Not financial advice. Court filings, exchange listings, and token prices can all move before the next hearing. --- Source: PTYcoin — https://ptycoin.com/en/posts/2026-07-23-movement-labs-chapter-11-bankruptcy/. Free to read and cite with attribution to ptycoin.com. AI-usage terms: https://ptycoin.com/en/ai-usage/