MVMT Labs, the original development company behind the Movement blockchain, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware on July 15, 2026.

In the filing, the company reported assets ranging from $100,001 to $500,000, while its total liabilities were estimated to reach as much as $10 million. The largest unsecured claim belongs to its ousted co-founder, Rushikesh “Rushi” Manche, and is valued at more than $1.6 million.

The bankruptcy filing marks the latest development in a series of problems that Movement Labs has faced since the launch of the MOVE token in December 2024. The issues include alleged misconduct involving a market-making agreement, trading suspensions on several exchanges, leadership changes, and the restructuring of the network’s development operations.

Rushi Manche’s Claim Dominates the Creditor List

According to reports, MVMT Labs listed as many as 299 creditors in its bankruptcy filing. Manche was identified as the largest unsecured creditor, with a claim exceeding $1.6 million.

Although he was dismissed from the company in May 2025, Manche reportedly continues to hold a 34.25% ownership stake in MVMT Labs. He previously sued the company in the Delaware Court of Chancery and secured the right to receive advance payments for his legal expenses.

The legal costs were related to a United States Department of Justice grand jury investigation into the controversy surrounding the MOVE token launch. At the time of writing, there has been no information indicating that the investigation has resulted in criminal charges against Manche.

Other parties listed as creditors include the Delaware Division of Corporations, which reportedly holds a claim of approximately $459,000, as well as Move Industries, digital asset custodian Anchorage Digital, and blockchain security auditing firm Ottersec.

MVMT Labs filed its case under Subchapter V of Chapter 11. This mechanism provides a simplified restructuring process for smaller businesses and may allow the company to continue operating under court supervision while preparing a plan to repay its debts.

Court documents indicate that the company is expected to submit its restructuring plan by October 13, 2026.

MOVE Market-Making Scandal Triggered an Internal Crisis

MVMT Labs previously served as the primary research and development company behind Movement Network. The network was initially developed as an Ethereum Layer 2 blockchain using the Move programming language, which was originally created by Meta for its discontinued Diem stablecoin project.

Before the crisis emerged, Movement Labs raised tens of millions of dollars from investors. One of its largest funding rounds was a $38 million Series A led by Polychain Capital in April 2024.

Problems began to surface following the launch of the MOVE token in December 2024. The controversy centered on a market-making agreement that gave control of 66 million MOVE tokens, equivalent to approximately 5% of the total supply, to an entity known as Rentech.

The tokens were reportedly sold in large quantities shortly after the launch. Binance stated that the market maker involved sold MOVE tokens without conducting sufficient buying activity to maintain two-sided market liquidity.

Movement Network Foundation said it only became aware of the activity after receiving information from Binance in March 2025. The foundation subsequently terminated its relationship with the market maker and used $38 million in recovered funds to conduct a MOVE token buyback program.

The case highlights the importance of proper oversight and compliance with the Binance market maker guidelines to prevent trading practices that may harm liquidity and token holders.

Coinbase later announced that it would suspend MOVE trading on May 15, 2025, after determining that the token no longer met its listing standards. Binance also took action against the market maker account involved in the token sales.

Movement Labs suspended Manche on May 2, 2025, before officially terminating its relationship with him five days later. The company said the decision was taken amid an independent review of its corporate governance and the activities of external market makers.

Move Industries Says Network Operations Remain Unaffected

Following Manche’s dismissal, Movement’s development and operational responsibilities were gradually transferred to Move Industries, a separate company led by Torab Torabi.

Movement Network Foundation stated that the operational transition was completed in December 2025. Move Industries subsequently became the primary service provider responsible for building, operating, and developing the Movement ecosystem on behalf of the foundation.

Torabi emphasized that Move Industries was not involved in the MVMT Labs bankruptcy filing. According to him, the two companies are separate legal entities, and Move Industries’ operations continue as normal.

This distinction is important because MVMT Labs’ Chapter 11 filing does not automatically mean that the Movement blockchain has ceased operations. Network development, infrastructure, and ecosystem services are currently managed by a different company.

Movement has also changed its development strategy. The project, which was initially positioned as an Ethereum Layer 2 network, is now being developed as an independent Layer 1 blockchain focused on stablecoin payments, remittances, cross-border settlement, and financial services for emerging markets.

The transition is taking place amid a broader debate over the relationship between Ethereum Layer 1 and Layer 2 networks, particularly as more projects choose to develop more independent blockchain infrastructure.

MOVE Price Remains Near an All-Time Low

Uncertainty surrounding Movement’s original development company has added further pressure to market sentiment toward MOVE.

Based on CoinGecko data, MOVE was trading at approximately $0.0107, with a market capitalization of around $44 million. The token had declined by approximately 93.7% over the past year and more than 99% from its all-time high of $1.45, recorded in December 2024.

MOVE also reached an all-time low of approximately $0.01043 on July 20, 2026, several days after MVMT Labs filed for bankruptcy. However, the price decline cannot be attributed entirely to the bankruptcy filing because the token had already been in a prolonged downward trend since the market-making scandal emerged in 2025.

From a fundamental perspective, the legal separation between MVMT Labs and Move Industries may help preserve the network’s technical continuity. Nevertheless, the bankruptcy of Movement’s original development company remains a reputational risk for the project, particularly because the case involves corporate governance, token distribution, and oversight of third-party service providers.