Movement Labs files for Chapter 11 bankruptcy after token scandal

Movement Labs, developer of the Movement blockchain, has filed for Chapter 11 bankruptcy following a major token scandal. The filing lists up to $10M in liabilities after a market maker dumped 66 million MOVE tokens, causing a price crash and exchange delistings. The controversy led to the ouster of co-founder Rushi Manche, who is now the largest creditor, and a strategic pivot toward payments by a separate entity, Move Industries.

Chapter 11 bankruptcy filing

• ▪MVMT Labs, Inc., the developer of the Movement blockchain, filed for Chapter 11 bankruptcy on July 15, 2026
• ▪The company listed between 200 and 999 creditors
• ▪The bankruptcy was filed in the U.S. Bankruptcy Court for the District of Delaware
• ▪Ousted co-founder Rushi Manche is listed as the largest unsecured creditor with a claim of over $1.6 million
• ▪In its filing, Movement Labs reported assets between $100,001 and $500,000 and liabilities of up to $10 million

Token market-making scandal

• ▪The company's troubles began after its MOVE token launch in December 2024
• ▪The 66 million tokens were sold on the market shortly after the launch, causing a sharp price decline
• ▪The price of the MOVE token has fallen approximately 99% from its all-time high reached in December 2024
• ▪Prior to the scandal, Movement Labs had raised tens of millions, including a $38 million Series A funding round led by Polychain
• ▪A market-making agreement gave an entity called Rentech control of 66 million MOVE tokens, representing about 5% of the total supply
• ▪Cryptocurrency exchanges Binance and Coinbase suspended trading of the MOVE token following the scandal

Leadership separation

• ▪Following the scandal, development of the Movement blockchain was transferred to a separate company called Move Industries
• ▪Move Industries, led by Torab Torabi, is not involved in the MVMT Labs bankruptcy proceedings
• ▪Despite being ousted, Rushi Manche retains a 34.25% equity stake in Movement Labs
• ▪Movement Labs separated from its co-founder, Rushikesh “Rushi” Manche, in May 2025 amid the token scandal

Strategic pivot to payments

• ▪The Movement Foundation conducted token buybacks to stabilize the ecosystem
• ▪In June 2026, Move Industries announced a strategic pivot for the Movement Network
• ▪Move Industries stated it had secured access to licensed payment infrastructure in the U.S., Canada, and the European Union
• ▪The new focus is on cross-border payments and remittances, rather than competing as an Ethereum scaling network