Movement Labs, the Web3 blockchain development company behind the Movement network, filed for bankruptcy protection under Chapter 11, concluding a rollercoaster ride that included a token distribution scandal, leadership exits, and a last-minute business pivot that couldn’t save the project.
The filing comes about a year after reports surfaced of a market-making arrangement involving Movement’s MOVE token that enabled a single counterparty to offload millions of tokens within hours of launch, prompting a sharp price crash.
That episode set off a chain of internal reviews, leadership changes, and an eventual strategic reset toward payments infrastructure, none of which proved enough to keep the company off the bankruptcy docket.
Movement is built on top of Ethereum layer-2 and uses the Move programming language created at Meta to provide cheaper and faster smart contract execution. The trouble began almost as soon as its MOVE token went live in December 2024.
A CoinDesk investigation later uncovered that Movement had signed a market-making deal granting outsized control over token supply to a little-known intermediary, Rentech, linked to Chinese market maker Web3Port.
You may have seen the news about the Chapter 11 filing by MVMT Labs, Inc. on July 15th.
Two things worth saying clearly:
1 – MVMT Labs, Inc. is a separate legal entity, and Move Industries is not part of that filing.
2 – Move Industries is operating normally.
We continue to…
— Torab (@torabyou) July 21, 2026
Documents showed the arrangement let 66 million tokens flood the market within a day of launch, tanking the price and prompting accusations that Movement’s own foundation may have been misled about who it was really dealing with. Rentech has pushed back against any suggestion of wrongdoing.
The aftershocks spread quickly. Binance banned the trading account connected to the token launch, citing misconduct, while Movement rolled out a buyback program and brought in third-party investigators at Groom Lake to dig into what went wrong.
Co-founder Rushi Manche exited the company in May 2025 amid the fallout. This year, Movement tried to reinvent itself, announcing in June a shift away from the increasingly crowded layer-2 race toward cross-border payments, remittances, and stablecoin settlement, backed by newly secured licensed payment access across the U.S., Canada, and the EU.
The Chapter 11 filing now casts doubt on Movement’s blockchain, its partnership network and its payments ambitions, with the pivot. A company typically can continue operating while reorganizing its debts in court-supervised proceedings under Chapter 11, meaning Movement’s network could keep running even as its corporate fate hangs in the balance.
Movement Labs has filed for Chapter 11 bankruptcy following a token dumping scandal that eroded community trust over a brutal year. The Move-based Ethereum Layer 2 never recovered from the reputational damage. $MOVEhttps://t.co/zydTGs3ats
— Ben (@BenX_HQ) July 22, 2026
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