From $3 billion darling to Delaware bankruptcy court

Movement Labs, the developer behind the Movement blockchain, filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware, with the news breaking publicly on July 21. Court filings reportedly list assets of between $100,001 and $1 million against liabilities of $1 million to $10 million, with between 200 and 999 creditors.

That is a dramatic fall for a project that raised roughly $100 million in a Series B in early 2025 at a valuation of around $3 billion, led by CoinFund with backing from Brevan Howard, after an earlier $38 million Series A led by Polychain Capital.

The MOVE token scandal that started it all

The company's troubles trace back to the launch of its MOVE token in December 2024. Just one day after launch, about 66 million MOVE tokens, roughly 5% of the total supply, were dumped into the market, triggering a sharp price decline.

An internal investigation later suggested Movement may have been misled into signing a market-making agreement, with questions centering on an intermediary called Rentech, connected to Chinese market maker Web3Port. Rentech denied wrongdoing. The fallout was severe: Binance banned the market-making account involved, Coinbase delisted MOVE for failing its listing standards, and co-founder Rushi Manche was suspended and later separated from the company in May 2025.

A failed pivot could not save the company

Movement Labs tried to reinvent itself. In June 2026 the company pivoted toward cross-border payments and stablecoin settlement, but the rebrand failed to produce a recovery before the bankruptcy filing.

By the time of the filing, MOVE was trading at roughly $0.01, down about 99% from its all-time high of $1.45 set in December 2024. A separate entity called Move Industries, created in May 2025 with new leadership, has said it is operating normally and is distinct from the bankrupt MVMT Labs entity.

Why this matters for the market

The Movement Labs collapse is one of the most dramatic failures of the 2024–2025 crypto funding cycle, and it has become the industry's benchmark case for the risks of opaque market-making agreements.

Big-name venture backing did not protect the project from what happened after launch, and the case shows how quickly a token scandal can destroy trust, exchange listings, and ultimately the company itself. Chapter 11 does allow the company to continue operating during restructuring, but the gap between its former valuation and the assets listed in court filings tells its own story.

A cautionary tale for token launches

For investors and builders alike, this bankruptcy is a reminder that tokenomics and market-making arrangements deserve as much scrutiny as the technology itself.

Movement's tech stack, an Ethereum Layer 2 built with the Move programming language, was never the problem. The project was undone by what happened around the token, not on the chain. As more projects prepare token launches in the current cycle, the Movement saga is likely to be cited for years as the example of what can go wrong.