Key Insights
- Movement Labs filed for bankruptcy in Delaware, with its co-founder being the leading creditor.
- The project has been under significant scrutiny over the past year after a scandal over its MOVE token.
- However, the splinter firm Move Industries has said it is not affected by the filing.
MVMT Labs Inc., known as Movement Labs, filed for Chapter 11 bankruptcy protection in Delaware on July 15.
The filing showed assets between $100,001 and $500,000. Estimated liabilities ranged from $1 million to $10 million.
The U.S. Bankruptcy Court for the District of Delaware registered the petition as case 26-11113-TMH. Bankruptcy Judge Thomas M. Horan received the case, which proceeded under the Subchapter V small-business process.
Movement Labs originally developed Movement, an Ethereum Layer 2 network launched in 2024. The network aimed to bring Move-based smart contracts into the Ethereum ecosystem.
Movement Labs Co-founder Leads Creditors in Bankruptcy Case
According to the bankruptcy filing, the firm could have up to 299 creditors, with co-founder Rushikesh “Rushi” Manche having the largest unsecured claim at more than $1.6 million.
Manche was ousted from the Movement Labs following its token scandal in 2024. One of the firm’s market makers had dumped 66 million MOVE tokens the day after the token launch in December 2024.
This led to the price falling from its peak of $1.45, and several exchanges also delisted the MOVE token due to the incident. A Coindesk investigation in April 2025 found that Movement Labs was investigating the incident and questioning whether it had been misled.
While Manche was terminated, he reportedly retained a 34.5% equity stake. The co-founder also has another case against Movement Labs at the Delaware Chancery Court.
Move Industries Say MOVE Token Unaffected
Meanwhile, Move Industries, a firm founded by other members of the Movement Labs team in May 2025, has distanced itself from the bankruptcy.
The CEO of Move Industries, Torab Torabi, said on X that the firm continues to operate normally and is not affected by the filing. “MVMT labs filing for bankruptcy impacts us the same way Tesla filing for bankruptcy would impact us….not at all,” he said.
Move Industries had declared itself the steward of the Move ecosystem and recently announced a pivot to payments, cross-border remittances, and stablecoin settlement.
The firm said in June that it had secured access to licensed infrastructure to offer these services in the US, Canada, and Europe. Torabi confirmed that the plan remains the same, noting that he had just returned from a trip to East Africa, where he met with the Ethiopian central bank to discuss stablecoin adoption.
So far, the MOVE token has remained unmoved by the bankruptcy filing, with only a slight price drop. However, it has been in decline for the past year, crashing 68% year to date. At $0.01075, it is 99% below its peak price of $1.45.
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