Movement Labs, the core development company behind the Movement blockchain, filed for Chapter 11 bankruptcy earlier this month in the U.S. Bankruptcy Court for the District of Delaware, according to a post that surfaced on Tuesday. The filing, posted on July 15, reported assets between $100,001 and $500,000 and liabilities of up to $10 million, with up to 299 creditors listed. The largest unsecured claim belongs to co-founder Rushikesh 'Rushi' Manche at over $1.6 million, who retains a 34.25% equity stake and previously won advancement of legal fees related to a DOJ grand jury investigation into a MOVE token launch scandal. The bankruptcy follows a major controversy in December involving a market-making agreement that gave an entity called Rentech control of 66 million MOVE tokens, which were rapidly dumped after launch, triggering a price crash and causing Binance and Coinbase to suspend trading.
Movement Labs Reports Assets and Creditor Claims in Bankruptcy Filing
In the filing posted on July 15, Movement Labs reported assets between $100,001 and $500,000 and liabilities of up to $10 million. The company listed up to 299 creditors. The largest unsecured claim belongs to co-founder Rushikesh 'Rushi' Manche at over $1.6 million. Manche retains a 34.25% equity stake in the company and previously sued Movement Labs in Delaware Chancery Court, winning advancement of his legal fees related to a DOJ grand jury investigation into the MOVE token launch scandal.
Other notable creditors include the Delaware Division of Corporations, allegedly owed $459,000, Move Industries, Anchorage Digital, and auditing firm Ottersec. MVMT Labs was the primary research and development firm behind the Movement Network, an Ethereum Layer 2 built on the Move programming language, which was developed initially for Meta's defunct stablecoin project. The company raised tens of millions in funding, including a $38 million Series A led by Polychain, before its December token launch was derailed by scandal.
MOVE Token Scandal Triggered Exchange Trading Suspensions
The controversy centered on a market-making agreement that gave an obscure entity called Rentech control of 66 million MOVE tokens, roughly 5% of the total supply. These tokens were rapidly dumped shortly after launch, triggering a sharp price crash. The incident caused Binance and Coinbase to suspend trading of the MOVE token.
A subsequent internal investigation led to the termination of Manche. The scandal occurred following the December launch of the MOVE token, after Movement Labs had raised significant funding including the $38 million Series A round led by Polychain.
Movement Labs Shifted Operations to Move Industries Following Scandal
Following the scandal, MVMT restructured its operations, shifting core blockchain development work to Move Industries, led by Torab Torabi. The project pivoted toward becoming a sovereign Layer 1 blockchain with a focus on financial services for emerging markets. The Movement Foundation conducted token buybacks to stabilize the ecosystem.
Torabi stated on Tuesday that Move Industries is not involved in MVMT's bankruptcy. The operational shift separated the ongoing blockchain development from the bankrupt entity Movement Labs.
FAQ
What did Movement Labs file on July 15?
Movement Labs filed for Chapter 11 bankruptcy earlier this month in the U.S. Bankruptcy Court for the District of Delaware, with the filing posted on July 15. The company reported assets between $100,001 and $500,000 and liabilities of up to $10 million, listing up to 299 creditors.
Why did Binance and Coinbase suspend MOVE token trading?
Binance and Coinbase suspended trading of the MOVE token after a market-making agreement gave an entity called Rentech control of 66 million MOVE tokens (roughly 5% of total supply), which were rapidly dumped shortly after the December launch, triggering a sharp price crash.
How did Movement Labs restructure after the token scandal?
Following the scandal, MVMT restructured its operations by shifting core blockchain development work to Move Industries, led by Torab Torabi. The project pivoted toward becoming a sovereign Layer 1 blockchain with a focus on financial services for emerging markets, while the Movement Foundation conducted token buybacks to stabilize the ecosystem.
