Movement Labs Files for Bankruptcy Protection, Capping Token Turmoil

Restructuring under Subchapter V

The bankruptcy filing on 15 Jul in Delaware was under Subchapter V, a process designed for smaller businesses to reorganize while continuing operations. It applies to Movement Labs, which filed as MVMT Labs, Inc., and not to Move Industries, which completed its takeover of development and operations of the Movement ecosystem in December 2025, under a transition first announced in May 2025.

The Movement network used a programming language designed to reduce smart-contract vulnerabilities, originally developed at Facebook (now Meta) for its Diem stablecoin project, and anchored on Ethereum as the security and settlement layer. The company raised more than $41mn from venture capital and industry investors, including $38mn in a Series A led by Polychain Capital in April 2024.

Move Industries stays separate

Move Industries CEO Torab Torabi said in a 21 Jul X post that the two companies are distinct legal entities and that his company is not part of the filing. "Move Industries is operating normally. We continue to put our heads down and build," he posted.

In the bankruptcy filing, Movement Labs listed liabilities of between $1mn and $10mn against assets of $100,001 to $500,000, and at between 200 and 999 creditors. The largest unsecured claim, of more than $1.6mn, is held by former co-founder Rushi Manche, who holds a 34% stake in the company.

Binance offboards market maker

Movement's MOVE token went live in December 2024, but the debut was quickly followed by questions over how the market-making setup was arranged, centred on an entity that reportedly sold a large amount of MOVE soon after listing.

Crypto exchange Binance said it offboarded the market maker on 18 Mar 2025, informed Movement Labs and the Movement Network Foundation about irregularities and froze the proceeds. The entity had sold about 66mn MOVE tokens with little buy support and netted about $38mn in Tether's USDT stablecoin, Binance said. Binance did not name the market maker; CoinDesk and other outlets identified it as Web3Port.

Token slides, co-founder ousted

As the fallout escalated, Movement Labs suspended co-founder Manche. Coinbase shifted MOVE order books to limit-only mode on 1 May 2025 before suspending trading on 15 May. The token fell to about $0.18 in early May 2025, some 87% below its 10 Dec 2024 peak of $1.45, according to CoinMarketCap. MOVE traded at about $0.011 on 22 Jul.

Manche's suspension and later termination came amid a third-party review of organizational governance commissioned by the Movement Network Foundation and conducted by digital asset intelligence firm Groom Lake, and just as Coinbase was moving to halt MOVE trading following Binance's action.

The former co-founder petitioned the Delaware Court of Chancery to force Movement Labs to advance his legal fees related to a US Department of Justice grand jury investigation into the MOVE token. A Chancery magistrate ruled in his favour in March 2026; the company filed exceptions to that report.

Pivot to stablecoin settlement

Move Industries, which took over core development responsibilities and key staff from Movement Labs and completed Movement's migration from an Ethereum Layer-2 to a standalone Layer-1 in December 2025, said in June that it would move away from competing with other Ethereum scaling networks. It also said it would focus instead on cross-border payments, remittances and stablecoin settlement, and that it had secured access to licensed payment infrastructure in the US, Canada and the EU.