MVMT Labs, Inc., the developer behind the Movement blockchain, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on July 15, 2026 (Case No. 1:26-bk-11113). The company listed assets between $100,001 and $500,000 against liabilities of $1 million to $10 mill...
"This is possibly the worst agreement I have ever seen." — YK Pek, Legal Counsel, Movement Foundation, in internal email regarding the Rentech market-making deal (as reported by CoinDesk, April 2025)
MVMT Labs, Inc., the developer behind the Movement blockchain, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on July 15, 2026 (Case No. 1:26-bk-11113). The company listed assets between $100,001 and $500,000 against liabilities of $1 million to $10 million. The filing followed a 19-month spiral triggered by a controversial market-making agreement at the project's December 2024 token launch, which resulted in $38 million in token dumping by an intermediary called Rentech within 24 hours of listing.
Movement Labs had raised $141.4 million in venture capital across multiple rounds, reaching a reported $3 billion valuation in early 2025. The MOVE token now trades at approximately $0.01 — a 99% decline from its all-time high. The project generated as little as $1 in daily chain fees in recent months. The case is among the largest VC-backed crypto project failures of 2026, a year that has seen more than 70 funded crypto projects shut down according to data from RootData.
MVMT Labs filed under Chapter 11, Subchapter V — a provision designed for small businesses — in Delaware on July 15, 2026. Judge Thomas M. Horan presides over the case. Jeffrey Schwendeman was appointed trustee.
Court documents list between 200 and 999 creditors. The largest unsecured claim belongs to ousted co-founder Rushikesh "Rushi" Manche at approximately $1.6 million. Manche retains a 34.25% equity stake in the bankrupt entity. Other named creditors include Anchorage Digital, OtterSec, Move Industries, and the Delaware Division of Revenue (owed approximately $459,000).
Key deadlines: creditors must file claims by September 14, 2026. A restructuring plan is due by October 13, 2026. A creditors' meeting is scheduled for August 20, 2026.
The stark gap between money raised ($141.4 million) and assets declared ($100,001–$500,000) raises immediate questions about capital deployment and governance — questions the bankruptcy proceedings may eventually answer.
Pre-seed round: $3.4 million raised to develop an Ethereum Layer 2 using Meta's Move programming language.
April 2024: Series A raised $38 million, led by Polychain Capital. The thesis: bring Move-based smart contracts to Ethereum, offering faster execution and lower costs than Solidity-native chains.
Early 2025: Series B reportedly approached $100 million, led by CoinFund with participation from Brevan Howard Digital. The round valued Movement Labs at approximately $3 billion.
December 9, 2024: MOVE token launched on Binance. Within 24 hours, 66 million tokens (approximately 5% of total supply) were sold into the market through intermediary Rentech, generating roughly $38 million and triggering a sharp price decline.
April 2025: CoinDesk published an investigation revealing secret contracts, shadow advisers, and hidden middlemen in the token launch. Foundation legal counsel YK Pek had internally flagged the Rentech agreement as "possibly the worst agreement" he had seen, according to internal communications obtained by CoinDesk.
May 2025: Coinbase suspended MOVE trading, citing the token no longer met listing standards. Binance banned the market-making account for misconduct. Movement Labs suspended co-founder Rushi Manche.
December 2025: Move Industries, a separate legal entity staffed by former Movement Labs employees, assumed core development. Torab Torabi became CEO; Will Gaines became president and CMO.
June 2026: Move Industries announced a pivot toward cross-border payments, remittances, and stablecoin settlement, abandoning the original Layer 2 thesis.
July 15, 2026: MVMT Labs filed for Chapter 11 bankruptcy.
July 20, 2026: MOVE token hit an all-time low of $0.01044.
The proximate cause of Movement's collapse centers on a market-making agreement involving Rentech and the Chinese market maker Web3Port.
According to CoinDesk's investigation, the agreement transferred 66 million MOVE tokens to Rentech — an entity with no prior public record. Rentech appeared in the contract on both sides of the deal: once as a Web3Port subsidiary and once as an agent of Movement Foundation. This dual representation raised self-dealing concerns that were flagged internally before the deal was finalized.
Movement Foundation director Marc Piano initially refused to sign the original agreement. A revised version was executed on December 8, 2024, one day before the token's Binance listing. While extreme clauses were removed, the core structure — lending 5% of total supply to a third party with minimal oversight — remained intact.
Within 24 hours of listing, wallets linked to Web3Port sold the tokens, generating approximately $38 million in USDT. Binance data showed minimal corresponding buy-side activity, confirming a one-directional dump.
Binance subsequently banned the associated account. Movement Labs initiated a token buyback program and hired security firm Groom Lake to conduct an external review.
After the scandal, Manche said "mistakes were made" but denied coordinating improper activity. He was formally separated from the project in May 2025. By December 2025, he had launched Nyx Group, a new venture planning to deploy up to $100 million in liquid token markets.
Movement's on-chain metrics tell a story of a network that never achieved product-market fit.
Daily app revenue has stayed below $800 every day since November 2025, according to data tracked by CoinGabbar. On recent days, the chain recorded as little as $1 in total fees over a 24-hour period.
Total Value Locked (TVL) stands at approximately $133 million. Analysts attribute this primarily to point-farming programs rather than organic user activity.
Token metrics as of July 22, 2026:
The gap between a $133 million TVL and negligible fee revenue suggests capital was parked on-chain for incentive farming, not for productive economic activity. This pattern — high TVL, zero revenue — has been a recurring marker of projects that fail to generate sustainable value.
Move Industries, the entity that assumed development in late 2025, maintains that it is legally and operationally separate from MVMT Labs.
CEO Torab Torabi stated on July 21, 2026: "Move Industries is operating normally. We continue to put our heads down and build."
The pivot away from the original Ethereum Layer 2 thesis is significant. Move Industries has obtained licensed payments infrastructure in North America and Europe and now targets cross-border payments, remittances, and stablecoin settlement — a fundamentally different market than the smart contract platform originally pitched to investors.
Whether the Movement blockchain retains any technical or network advantages in the payments space — a crowded segment with established competitors including Stellar, Ripple, and numerous stablecoin rails — remains an open question. The pivot itself may signal that the original Layer 2 thesis was commercially unviable.
Movement Labs is not an isolated case. According to data from RootData, more than 70 funded crypto projects shut down during the first half of 2026. Key patterns emerge:
VC-backed failures accelerated. Three projects backed by Andreessen Horowitz's crypto arm — Yupp, Syndicate Labs, and Entropy — collectively accounted for $87 million in failed deployments. According to BeInCrypto, 10 VC-backed crypto projects lost more than 90% of their value during this period.
Bitcoin's 23% decline in Q1 2026 reduced investor appetite for high-risk crypto ventures. Venture capital shifted toward projects demonstrating real revenue generation, product-market fit, and sustainable business models.
Common failure patterns across the 70+ shuttered projects include: overreliance on token incentives rather than product utility, governance opacity, misaligned market-maker agreements, and infrastructure-first development without clear demand signals.
The Movement case is notable for the scale of the gap between capital raised ($141.4 million) and value remaining (under $500,000 in declared assets). It illustrates how token-launch mechanics, if poorly structured, can destroy a project faster than any technology failure.
$141.4 million raised, under $500,000 in assets declared. Movement Labs' bankruptcy represents one of the starkest capital-destruction events in the 2026 crypto landscape.
A single market-making deal triggered the collapse. The Rentech agreement, which lent 5% of token supply to an entity with dual representation on both sides of the contract, resulted in a $38 million dump within 24 hours of listing.
On-chain activity never materialized. Daily chain revenue below $800 for eight consecutive months and as low as $1 on recent days indicates the network never achieved sustainable usage.
70+ crypto projects failed in H1 2026. Movement is part of a broader pattern of VC-backed projects collapsing after failing to demonstrate product-market fit beyond token speculation.
Corporate restructuring ≠ network death. Move Industries continues to operate under separate legal structure, pivoting to payments infrastructure — though the viability of this pivot is unproven.
Token governance failures carry existential risk. The case demonstrates that a flawed token distribution can erase billions in value faster than any code vulnerability.
Movement Labs' trajectory from $3 billion valuation to Chapter 11 bankruptcy in 18 months condenses several structural weaknesses of the 2026 crypto market into a single case study. The project raised $141.4 million in venture capital, launched a token that was immediately undermined by a market-making agreement its own legal counsel called "possibly the worst" he had seen, and generated negligible on-chain revenue for the duration of its operation.
The bankruptcy filing does not necessarily mean the end of the Movement blockchain. Move Industries, the successor development entity, continues to operate and has pivoted to payments infrastructure. But the original investment thesis — a Move-based Ethereum Layer 2 competing on execution speed — is effectively abandoned.
For the broader market, the case reinforces a pattern visible across the 70+ project failures of 2026: tokens are not products, incentives are not users, and valuation without revenue is arithmetic without a foundation. The creditor claims deadline of September 14, 2026, and the restructuring plan due October 13, 2026, will determine what, if anything, remains for the 200-to-999 creditors left holding the residual.
Movement Labs files for Chapter 11 bankruptcy months after token scandal — CoinDesk, July 21, 2026. First reported the bankruptcy filing with court document details.
Movement Labs Bankruptcy: How a $141.4M Bet Ended in Collapse — CoinGabbar, July 2026. Detailed financial analysis including on-chain revenue data.
Movement creator MVMT Labs files for Chapter 11 bankruptcy after turbulent year — Crypto Briefing, July 2026. Funding history and corporate structure details.
From a $3B Valuation to Bankruptcy: Movement Labs Files Chapter 11 — Crypto Times, July 22, 2026. Valuation trajectory and creditor details.
Movement Labs Files for Chapter 11 Bankruptcy After $38M MOVE Token Scandal — Blockonomi, July 2026. Legal proceedings and timeline details.
Inside Movement's Token-Dump Scandal: Secret Contracts, Shadow Advisers and Hidden Middlemen — CoinDesk, April 30, 2025. Original investigative report on the Rentech market-making deal.
Over 60 crypto projects shut down in 2026, led by a16z-backed Yupp, Syndicate, and Entropy — Crypto Briefing, July 2026. Broader market context on project failures.
Why 70+ Crypto Projects Shut Down in 2026 — CryptoNews, July 2026. Industry-wide shutdown data from RootData.
Ousted founder's $1.6 million claim tops Movement Labs' bankruptcy filing — The Block, July 2026. Creditor claim details.
Rushi Manche returns with $100M fund after scandalous Movement Labs exit — Cryptopolitan, December 2025. Post-exit developments.