One of the most hyped crypto projects of the last cycle has reached the end of the line. MVMT Labs, Inc., the Delaware corporation historically associated with the Movement blockchain, filed for Chapter 11 bankruptcy protection on July 15, 2026, in the US Bankruptcy Court for the District of Delaware, a filing that formalizes the collapse of a venture once valued in the billions.
The numbers in the petition tell the story in miniature. A company that was reportedly on the cusp of a $3 billion valuation in early 2025 now lists estimated assets of just $100,001 to $500,000, against liabilities of between $1 million and $10 million.
What The Filing Says
The case, styled In re MVMT Labs, Inc. (Case No. 1:26-bk-11113), was filed under Subchapter V of Chapter 11, a streamlined reorganization track reserved for smaller businesses, and assigned to the Honorable Thomas M. Horan. The debtor listed between 200 and 999 creditors, with debts described as primarily business in nature. The deadline for creditors to file proofs of claim is September 14, 2026, and a reorganization plan is expected around mid-October under Subchapter V’s accelerated timeline. The company has signaled it is winding down certain operations as the case proceeds.
The creditor list reads like a roster of the project’s unraveling. Former co-founder and CEO Rushikesh “Rushi” Manche, the executive Movement terminated in 2025, holds the largest unsecured claim, at more than $1.6 million. Despite his ouster, Manche still owns a 34.25% equity stake in the company, and he previously sued it in the Delaware Court of Chancery, securing payment of legal expenses tied to a US Department of Justice grand jury investigation into the MOVE token launch.
Other named creditors include crypto custodian Anchorage Digital, security auditor OtterSec, the separate entity Move Industries, and the Delaware Division of Corporations, which is reportedly owed roughly $459,000.
How A $3 Billion Darling Got Here
Movement’s rise and fall was compressed into barely a year. Founded by two Vanderbilt University dropouts, Rushi Manche and Cooper Scanlon, the project built a Layer-2 designed to bring Facebook’s Move programming language to Ethereum. It raised around $38 million from prominent investors, won a spot in the World Liberty Financial portfolio tied to the Trump family, and by January 2025 was reportedly close to a $100 million round at a $3 billion valuation.
The MOVE token launched in December 2024, and the trouble began almost immediately. The project had entered a market-making agreement involving a little-known intermediary called Rentech and the Chinese market maker Web3Port, under which roughly 66 million MOVE tokens, about 5% of the circulating supply, were transferred to the firm. When those tokens were dumped, they triggered a $38 million sell-off and a price crash. The structure drew intense scrutiny because Rentech appeared in contracts as both a Movement Foundation agent and a Web3Port affiliate; a dual role that crypto founder Zaki Manian said created incentives to inflate MOVE’s valuation before selling to retail traders, calling the arrangement “insane.”
The fallout was swift and severe. Binance banned the market-making account for what it called misconduct and froze the profits from the token sales; Coinbase delisted MOVE for failing to meet listing standards. Movement hired the outside firm Groom Lake to investigate, launched a $38 million buyback, suspended and then terminated Manche in May 2025, and rebranded its operating arm as Move Industries. But the reputational damage was done, and the DOJ opened a grand jury inquiry into the launch.
The On-Chain Epitaph
If the courtroom filing is the legal death certificate, the blockchain data is the autopsy. According to DeFiLlama figures, activity on the Movement chain has flatlined: since around November 2025, daily app revenue has hovered in the single digits, with just $1 in fees recorded across a recent 24-hour window. The MOVE token’s fully diluted valuation has cratered to roughly $107 million, a drop of more than 99% from its all-time high, despite the project having raised a cumulative $141.4 million in funding.
That gap between capital raised and value created is the starkest indictment of all. Few crypto collapses have so cleanly illustrated the disconnect between fundraising hype and actual usage: a chain that took in nine figures of investment now processes a rounding error in fees.
The Move Industries Distinction
A crucial clarification for users and investors: the bankruptcy is confined to a specific legal entity. Move Industries CEO Torab Torabi has stated that Move Industries, the development team now behind the broader Movement ecosystem, has no affiliation with MVMT Labs, is not part of the bankruptcy proceedings, and continues to operate normally.
The distinction is real but subtle, and it matters. It means the Movement network and MOVE token are not automatically extinguished by the filing; the ecosystem’s ongoing steward is a separate company. But it also underscores how thoroughly the original corporate vehicle has been hollowed out, a shell wound down through the courts while a successor entity attempts to carry the name forward. Whether that successor can rebuild anything of value on a chain generating $1 a day in fees is a separate question the bankruptcy does not answer.
A Cautionary Case Study
Movement’s bankruptcy is a landmark of a particular kind: a high-profile, VC-backed, billion-dollar-valued Layer-2 formally collapsing into Chapter 11, rather than simply fading into irrelevance. It is a cautionary tale that ties together the cycle’s most cautionary themes — opaque market-making deals, token dumps at retail’s expense, conflicts of interest between insiders and “independent” advisers, and valuations built on funding announcements rather than usage.
For a market that has spent 2026 arguing about regulatory clarity, illicit finance, and consumer protection, Movement is an unusually complete case study in what goes wrong without them: a project that raised $141 million, drew a federal grand jury, wiped out billions in paper value, and ended with less than half a million dollars in assets and its own co-founder first in line as a creditor. The MOVE token may technically survive under new stewardship. The story of MVMT Labs is now one for the bankruptcy docket.
Also Read: Solana Co-Founder Defends AI Training on Public Online Content
