MVMT Labs, Inc., the Delaware corporation behind the Movement blockchain, filed for Chapter 11 bankruptcy protection on July 15, 2026, in the U.S. Bankruptcy Court for the District of Delaware. The company lists between $100,001 and $500,000 in assets against $1 million to $10 million in liabilit...
"This is possibly the worst agreement I have ever seen." — YK Pek, Legal Counsel, Movement Network Foundation
MVMT Labs, Inc., the Delaware corporation behind the Movement blockchain, filed for Chapter 11 bankruptcy protection on July 15, 2026, in the U.S. Bankruptcy Court for the District of Delaware. The company lists between $100,001 and $500,000 in assets against $1 million to $10 million in liabilities, with 200 to 999 creditors. Fourteen months earlier, the same entity was approaching a $3 billion valuation on the strength of $141.4 million in cumulative venture funding.
The filing caps a sequence of events that began with a contested market-making agreement, accelerated through co-founder termination and a DOJ grand jury investigation, and concluded with blockchain fee revenue falling to single-digit dollars per day. The MOVE token, which peaked at $1.45 on December 10, 2024, traded at $0.010 on July 24, 2026 — a decline exceeding 99%. A separate entity, Move Industries, continues to operate the Movement blockchain network independently of the bankruptcy proceeding.
MVMT Labs filed under Subchapter V of Chapter 11, a streamlined reorganization process designed for qualifying small businesses. The designation permits the company to continue operating while restructuring under court supervision, without the overhead of a full Chapter 11 proceeding.
The court has established two critical dates. Creditors must file proofs of claim by September 14, 2026. MVMT Labs must present its formal reorganization plan by October 13, 2026. Under Subchapter V's accelerated timeline, the process is expected to conclude faster than a traditional Chapter 11 case, though no confirmed exit date has been set.
The filing was made in Delaware, where the company is incorporated. It covers only MVMT Labs, Inc. — not the Movement Network Foundation and not Move Industries, the entity that assumed development responsibilities in December 2025.
Movement Labs raised capital across two principal rounds. A $38 million Series A, led by Polychain Capital in April 2024, attracted participation from Hack VC, Placeholder, Archetype, Maven 11, Robot Ventures, Figment Capital, Nomad Capital, Bankless Ventures, OKX Ventures, dao5, and Aptos Labs. A subsequent $100 million Series B, co-led by CoinFund and Nova Fund (Brevan Howard's digital assets arm), closed in early 2025 at the peak of investor enthusiasm around Move-language blockchain ecosystems.
The $141.4 million total placed Movement Labs among the better-capitalized blockchain startups of the 2024–2025 cycle. According to the bankruptcy filing, assets now total between $100,001 and $500,000. The filings do not provide a detailed accounting of where the remaining capital went. What is visible on-chain is a network that generated, according to CryptoPotato, as little as $8 in daily fees at the time of filing — and as low as $1 in certain recent 24-hour windows.
The gap between capital raised and residual value represents one of the starkest venture capital outcomes in recent crypto history. Investors backed a $3 billion implied valuation. The MOVE token's fully diluted valuation as of July 24, 2026, stands at approximately $107 million, according to CoinMarketCap data. The token's circulating market capitalization is approximately $42 million.
The chain of events that led to bankruptcy traces to a market-making agreement executed around the December 2024 token launch. Under the deal, 66 million MOVE tokens — roughly 5% of total supply — were allocated to an intermediary called Rentech. Wallets linked to market maker Web3Port sold the tokens within one day of MOVE's exchange listing, generating approximately $38 million in proceeds and creating substantial downward price pressure.
The agreement's structure drew immediate scrutiny. Rentech appeared in contract documents as both a Movement Foundation agent and a Web3Port affiliate — a dual role that raised conflict-of-interest concerns. Foundation legal counsel YK Pek described the agreement as "possibly the worst agreement I have ever seen" in an internal email reported by CoinDesk. Foundation director Marc Piano refused to sign the document.
One clause stipulated that if MOVE's fully diluted valuation exceeded $5 billion, Rentech could liquidate the token allocation and split the profits 50-50 with the foundation. The provision effectively gave a single counterparty unusual influence over MOVE's circulating supply economics.
Binance responded by suspending Web3Port's market-making account for misconduct and freezing approximately $38 million of its profits for potential user compensation. The Movement Network Foundation announced a $38 million MOVE token repurchase program in an attempt to stabilize the market.
The market-making scandal escalated beyond corporate governance disputes. In May 2025, the U.S. Department of Justice issued a grand jury subpoena to MVMT Labs pertaining to the MOVE token issuance process. The investigation remains active as of July 2026.
Movement Labs suspended co-founder Rushikesh "Rushi" Manche in April 2025 in connection with the market-making arrangement. The company terminated him in May 2025, following the DOJ subpoena. Manche, who retains a 34.25% equity stake in MVMT Labs, subsequently sued the company in the Delaware Court of Chancery.
On March 6, 2026, Magistrate Wright ruled that Manche was entitled to advancement of his legal fees related to the DOJ grand jury investigation. The ruling followed Delaware's established precedent favoring enforcement of broadly drafted advancement provisions in corporate governing documents. Manche's legal fees now constitute the single largest unsecured claim in the bankruptcy proceeding, exceeding $1.6 million.
The legal situation creates an unusual dynamic: the company's former co-founder is simultaneously its largest creditor, a target of the federal investigation that contributed to its downfall, and a 34.25% equity holder in the bankrupt entity.
The Movement blockchain's on-chain metrics tell a story that venture capital could not override. Since approximately November 2025, daily application revenue on the network has hovered in single-digit dollars. CryptoPotato reported daily fees as low as $8 at the time of the bankruptcy filing. Other sources cite 24-hour periods with just $1 in total fees generated.
The network maintains approximately $134 million in total value locked (TVL) and $38.95 million in stablecoin market capitalization. However, multiple analysts have noted that much of the TVL appears connected to incentive programs and yield farming rather than organic user activity. When incentive spending outpaces fee revenue by orders of magnitude, TVL becomes a measure of subsidy absorption rather than economic demand — a dynamic consistent with the economic value framework that distinguishes protocol subsidy from protocol revenue.
The MOVE token launched at $1.45 on December 10, 2024, and traded at $0.010 as of July 24, 2026 — a 99.3% decline. The circulating market capitalization of approximately $42 million sits on 4.17 billion MOVE tokens in circulation, according to CoinMarketCap. Daily trading volume was approximately $8.4 million on July 24, a fraction of what it was at launch.
The bankruptcy petition identifies 200 to 999 creditors. Named creditors include:
The relatively low asset base ($100,001 to $500,000) against liabilities of $1 million to $10 million suggests that unsecured creditors may recover a fraction of their claims. The Subchapter V process, while faster, does not typically improve recovery rates for unsecured creditors versus standard Chapter 11.
Move Industries, led by CEO Torab Torabi, assumed development responsibilities for the Movement blockchain in December 2025. Torabi stated on July 21, 2026: "Move Industries is operating normally. We continue to keep our heads down and build."
Move Industries is a separate legal entity not included in the bankruptcy proceeding. It continues to maintain the Movement blockchain network, which remains operational. The entity's independence from MVMT Labs is a structural feature of the December 2025 reorganization that separated development operations from the original corporate shell.
Whether Move Industries can attract developer activity and economic usage to a chain associated with a bankruptcy filing and a DOJ investigation remains an open question. The network's current fee revenue — still in single-digit dollars daily — suggests the challenge is substantial.
MVMT Labs filed Chapter 11 on July 15, 2026, listing $100K–$500K in assets against $1M–$10M in liabilities, after raising $141.4M in venture capital at a peak $3B implied valuation.
A market-making agreement allocated 66 million MOVE tokens (5% of supply) to an intermediary with apparent conflicts of interest. Day-one liquidation generated $38M and collapsed the token price.
The DOJ is conducting a grand jury investigation into the MOVE token issuance. Former co-founder Rushi Manche's $1.6M legal fee claim is the largest in the bankruptcy.
On-chain fees fell to $1 per day, despite $134M in TVL — indicating that the network's locked value reflects incentive capture, not economic demand.
MOVE token is down 99.3% from its $1.45 all-time high to $0.010, with a circulating market cap of approximately $42M.
Move Industries operates independently of the bankruptcy and continues to maintain the blockchain, though the path to sustainable fee revenue is unclear.
Movement Labs' trajectory from $3 billion valuation to Subchapter V bankruptcy in 14 months is among the fastest collapses of a well-funded blockchain project in the current cycle. The $141.4 million in venture capital could not compensate for a token launch marred by a conflicted market-making arrangement, a federal investigation, and a network that failed to generate meaningful fee revenue.
The case illustrates a recurring pattern in blockchain venture capital: funding rounds priced on narrative and ecosystem potential, disconnected from any measurement of on-chain economic activity. A network generating $1 in daily fees cannot sustain the overhead required to service even modest liabilities, regardless of how much capital preceded it.
For creditors, the Subchapter V timeline offers a faster resolution — claims due September 14, reorganization plan due October 13. For the broader market, Movement Labs joins a growing list of well-capitalized projects where token launch mechanics, rather than technical failure, proved to be the terminal event. The DOJ investigation, still active, may yet produce findings with implications beyond this single case.