The original developer behind the Movement blockchain has entered Chapter 11 bankruptcy, with court filings showing a sharp decline from its once well-funded position while the broader Movement ecosystem continues operating under separate entities.
MVMT Labs, Inc., the original development company behind the Movement blockchain, has filed for Chapter 11 bankruptcy protection under Subchapter V in the U.S. Bankruptcy Court for the District of Delaware. Court documents filed on July 15 show the company reported estimated assets between $100,001 and $500,000 and liabilities between $1 million and $10 million, despite raising $38 million in Series A funding in 2024.
The filing marks the latest chapter in the unraveling of one of crypto’s highest-profile infrastructure startups. However, the bankruptcy applies only to MVMT Labs, Inc. and does not include the Movement Network Foundation, Move Industries, or the Movement blockchain itself, according to court records and subsequent company statements.
Court Filing Details Show Limited Assets
According to the Chapter 11 Subchapter V petition filed in Delaware Bankruptcy Court, MVMT Labs listed between 200 and 999 creditors and sought to reorganize under provisions designed for qualifying small businesses. The case, No. 26-11113-TMH, is assigned to Judge Thomas M. Horan. Initial court filings also appointed a Subchapter V trustee and scheduled a creditors’ meeting for August 20, 2026.
Subchapter V allows eligible businesses to restructure their debts while continuing operations, typically through a streamlined bankruptcy process compared with a traditional Chapter 11 proceeding.
Subsequent filings indicate MVMT Labs has requested debtor-in-possession financing to support operations during the restructuring process.
From $38 Million Funding Round to Bankruptcy
The bankruptcy contrasts sharply with MVMT Labs’ fundraising success just over two years ago.
In April 2024, the company announced a $38 million Series A financing led by Polychain Capital to expand development of the Movement ecosystem, which aimed to bring the Move programming language to Ethereum-compatible infrastructure.
Since then, the project has faced multiple setbacks, including controversy surrounding the MOVE token launch, governance changes, legal disputes involving co-founder Rushikesh “Rushi” Manche, and an internal restructuring that shifted operational responsibilities away from MVMT Labs.
Court records reviewed this week list Manche as the company’s largest unsecured creditor with a claim exceeding $1.6 million, while he continues to hold an equity stake in the company.
Movement Foundation Says Operations Continue
Before news of the bankruptcy emerged, the Movement Network Foundation announced that Move Industries had become its primary operating service provider following a broader organizational restructuring.
According to the Foundation, the transition transferred operational responsibilities to Move Industries to continue ecosystem development independently of MVMT Labs. The announcement, however, did not disclose which assets, intellectual property, or contractual rights were transferred during the restructuring.
That omission leaves an important question for creditors: which assets, if any, remain within the MVMT Labs bankruptcy estate and could ultimately be available to satisfy claims.
Move Industries has separately stated that it is not part of the Chapter 11 filing and continues normal business operations.
Why the Bankruptcy Matters
The filing illustrates how venture funding alone does not guarantee long-term sustainability in the digital asset industry.
While MVMT Labs secured substantial institutional backing during crypto’s previous funding cycle, the bankruptcy petition suggests the company retained relatively few assets by the time it sought court protection. The filing also highlights the complexity of crypto corporate structures, where operating companies, foundations, token issuers, and ecosystem contributors often exist as separate legal entities.
For Movement ecosystem participants, the immediate legal impact appears limited because the bankruptcy applies only to MVMT Labs rather than the blockchain network or Foundation. Nevertheless, future court proceedings may provide greater clarity regarding ownership of intellectual property, contractual rights, and other assets connected to the project’s early development.
What to Watch Next
Several developments could shape the restructuring over the coming months:
- The August 20 creditors’ meeting and subsequent bankruptcy hearings.
- Additional court filings detailing MVMT Labs’ remaining assets and liabilities.
- Disclosure of any intellectual property or contractual transfers completed before the bankruptcy.
- Potential recovery efforts by creditors and any challenges to pre-bankruptcy transactions.
For now, the available evidence indicates that while MVMT Labs is attempting to reorganize under Chapter 11, the broader Movement ecosystem continues operating through legally separate organizations. Future bankruptcy filings are expected to provide a clearer picture of what value, if any, remains available to creditors and how the restructuring may affect the project’s legacy.
