Movement Labs has filed for Chapter 11 bankruptcy protection in Delaware, bringing a formal end to one of crypto’s sharper reversals in recent years. The petition, received by the Delaware bankruptcy court on July 15, 2026, was filed by MVMT Labs, the company behind the Movement project. Court documents show assets of $100,000 to $500,000, liabilities of up to $10 million, and no more than 299 creditors.
The top creditor on the list is former co-founder Rushi Manche, who the company had already removed. He is listed with more than $1.6 million in unsecured claims and still holds a 34.25% equity stake in the company.
From breakout L2 narrative to bankruptcy court
Movement Labs was founded in 2022 by Cooper Scanlon and Rushi Manche, both in their early twenties. Its pitch was simple and attractive to crypto investors at the time: bring the Move programming language into the Ethereum ecosystem. Move had originally been developed for Meta’s Diem stablecoin effort, which gave the project an extra layer of narrative appeal.
Funding followed quickly. Movement raised $3.4 million in a pre-seed round in 2023, then closed a $38 million Series A in April 2024 led by Polychain Capital, bringing total funding to about $41.4 million. In January 2025, Fortune reported that the company was preparing a $100 million Series B at a $3 billion valuation.
It also drew political attention. World Liberty Financial, the Trump family-backed crypto project, bought and publicly supported the MOVE token. At that point, Movement had several of the themes that were drawing interest at once: Move, Layer 2, institutional backing, and a White House-adjacent political angle.
MOVE debuted on Binance on Dec. 9, 2024. That was the high point. The slide started the next day.
The agreement that came back to define the project
One day after the Binance listing, wallets linked to market maker Web3Port sold 66 million MOVE, about 5% of total supply, for roughly $38 million. The token price fell sharply after the sales.
A CoinDesk investigation published in April 2025 laid out how the arrangement worked. According to the report, the token flow passed through an intermediary called Rentech, an entity that previously had little or no digital footprint. Contract documents showed Rentech acting in two capacities within the same transaction: as an agent for the Movement Foundation on one side, and as a signatory on behalf of a Web3Port subsidiary on the other. The same company appeared to be sitting on both sides of the table.
The Movement Foundation’s legal counsel, after reviewing the documents, reportedly described it as “possibly the worst agreement” they had seen. The agreement was signed anyway.
One clause drew particular attention. If MOVE reached a $5 billion valuation, Web3Port would be allowed to liquidate tokens and split the profits 50/50 with the foundation. Analysts cited in the original report said the provision effectively embedded a pump-and-dump-style incentive into the contract and made the foundation a direct participant in the profit share.
Cointelegraph and other outlets reported that Singapore finance figure Galen Law-Kun was the operator behind Rentech. Rentech denied making any false representations.
One reaction after another
Once the arrangement became public, the response spread across the stack. Binance banned the market maker account tied to the incident. Coinbase suspended MOVE trading on May 15, 2025, saying the token no longer met its listing standards. The Movement Foundation cut ties with Rentech and launched a $38 million USDT buyback program in an attempt to stabilize trading.
The symmetry was hard to miss. About $38 million was taken out through the sell-off, and the foundation then committed $38 million to buy tokens back.
The internal fallout was just as severe. Manche was first suspended and then fired. The company accused him of signing an undisclosed agreement. Manche hit back in July 2025 by suing his former company in Delaware Chancery Court, where he won an order for advancement of legal fees. The article says those fees were tied directly to a U.S. Department of Justice grand jury investigation into the MOVE token issuance.
That helps explain why the bankruptcy filing now shows more than $1.6 million owed to Manche. The legal-fee obligation attached to his removal appears to have become the company’s largest listed debt.
The project’s development moved elsewhere
Core development work was shifted to a new entity, Move Industries, led by Torab Torabi. The strategic focus changed as well. What had been pitched as an Ethereum Layer 2 effort was recast as a sovereign Layer 1 project centered on cross-border payments and stablecoin settlement in emerging markets.
Move Industries has also said it secured access to licensed payments infrastructure in the United States, Canada, and the European Union. Even so, the market did not appear willing to give the broader project a reset.
MOVE still trades, but MVMT Labs is in court
After the bankruptcy news, MOVE traded around $0.0108. Set against the token’s early post-listing range, the original article described the decline in terms that approached a wipeout.
Torabi said on X that Move Industries and MVMT Labs are separate legal entities and that chain development and operations remain normal. His post said: “we keep building.”
The timeline is short and brutal. One day separated the Binance listing from the market maker sell-off. About a week separated the public scandal from the co-founder’s suspension. Nineteen months separated star-project status from a Chapter 11 filing.
There was no hack in this collapse. No exit scam. No lost private keys. What pushed Movement into bankruptcy was an internally signed contract that remained in force after legal review had already raised alarms.