Movement Labs Files for Bankruptcy Following MOVE Ecosystem Restructuring
Highlights
- Movement Labs has filed for Chapter 11 bankruptcy.
- Court filings show that the firm's liabilities are worth over $1 million.
- The MOVE is trading flat today amid the broader crypto market rally.
Movement Labs, the original developers behind the Move blockchain, have filed for bankruptcy in the U.S. This move comes after scandals involving the MOVE token and a restructuring that led to a major overhaul of the token’s ecosystem.
Movement Labs Files For Chapter 11 Bankruptcy
Court filings show that the firm filed for Chapter 11 bankruptcy last week with assets worth up to $500,000 and liabilities exceeding $1 million. Creditors include co-founder and CEO Rushi Manche, who left the company last year.
This follows several controversies that involved the MOVE token. Last year, there were allegations that Movement Labs had promised 10% of its MOVE token supply to early insiders. This had contributed to the sharp decline that the token suffered around that period.
There was also controversy about a market-making deal involving 66 million MOVE tokens that were sold after launch. The top crypto exchange Binance banned the market maker and froze the profits, which it used to compensate users.
Movement Labs also announced at the time that it had conducted an investigation and promised to carry out token buybacks. This was also around the time of the restructuring, with Move Industries taking over operations for the MOVE blockchain. Meanwhile, the company officially terminated the co-founder Rushi Manche for signing undisclosed deals.
Move Industries CEO Provides Clarification
In an X post, Move Industries CEO Torab clarified that Movement Labs is a separate legal entity from Move Industries and that the latter is not part of the filing. “Move Industries is operating normally. We continue to put our heads down and build,” he assured.
Move Industries led the pivot of the Move blockchain from an Ethereum layer-2 to an independent Layer-1 network late last year. The network now positions itself as a settlement layer for stablecoin payments in emerging markets.
The MOVE token is trading flat amid this development of Movement Labs filing for bankruptcy. The token is currently trading at around 0.0108, up less than 1%, according to TradingView data.
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