MVMT Labs, Inc., the company behind the Movement blockchain, has filed for Chapter 11 bankruptcy protection in Delaware, according to a petition submitted on July 15. The filing outlines a company with modest reported assets, significantly larger liabilities, and hundreds of creditors, while leaving open questions about how the restructuring could affect the network’s future.

Bankruptcy filing details

The case was filed in the U.S. Bankruptcy Court for the District of Delaware as a voluntary Chapter 11 petition under Subchapter V. Court records list MVMT Labs’ assets in the range of $100,001 to $1 million and liabilities between $1 million and $10 million. The filing also states that the company has between 200 and 999 creditors.

MVMT Labs is represented in the case by Potter Anderson & Corroon LLP. A meeting of creditors has been scheduled for Aug. 20, and the deadline to file claims is Sept. 14. Chapter 11 generally allows a company to continue operating while it seeks to reorganize its debts.

Among the largest creditors named in the filing are Movement co-founder Rushi Manche, the Delaware Division of Revenue, and crypto custodian Anchorage Digital.

What Movement set out to build

Movement launched as an Ethereum layer-2 network built with Move, the programming language originally created at Meta for its since-abandoned Diem initiative. The project’s pitch was to bring Move-based smart contracts into the Ethereum ecosystem while offering faster and lower-cost transactions.

That positioning placed Movement in the crowded market for Ethereum scaling networks, where projects have competed on performance, developer tooling, and user adoption.

Pressure after the MOVE token launch

The company’s problems escalated after the launch of the MOVE token in December 2024. In April 2025, CoinDesk reported that Movement had been examining whether it was misled into agreeing to a market-making arrangement that gave a single counterparty unusually large influence over the token’s circulating supply.

According to the report, internal documents indicated that the structure allowed 66 million MOVE tokens to be sold into the market one day after launch, a development that contributed to a steep decline in price. The documents focused on Rentech, described as an intermediary linked to Chinese market maker Web3Port. Rentech denied wrongdoing.

Binance later barred the market-making account connected to the token launch for misconduct. Movement responded by starting a token buyback program and retaining Groom Lake to review the agreement. In May 2025, Movement Labs and Manche parted ways, and Manche subsequently filed suit against the startup in Delaware.

A recent strategic pivot

Before the bankruptcy filing, the project had already begun shifting its focus. In June, Movement said it was moving away from direct competition with other Ethereum scaling platforms and toward cross-border payments, remittances, and stablecoin settlement. The company said that strategy would rely on access to licensed payment infrastructure in the United States, Canada, and the European Union.

The move aligned with a wider trend among layer-2 projects seeking real-world payment use cases as competition in the scaling sector increased.

It remains unclear how MVMT Labs’ Chapter 11 process will affect the Movement blockchain itself, its commercial relationships, or its stated payments ambitions.

Source: thedefiant.io