Movement Labs filed for bankruptcy, and the founder's $1.6 million claim was the largest debt

According to The Block, Movement Labs (MVMT), the original core development company of the Movement blockchain, applied for Chapter 11 bankruptcy protection with the Delaware Bankruptcy Court at the beginning of this month.

According to documents filed on July 15, the company reported assets of between $100,000 and $500,000 and liabilities of up to $10 million, listing nearly 299 creditors, the largest unsecured claim of over $1.6 million from the ousted co-founder Rushikesh Manche. Manche retains 34.25% of the shares and has previously been sued and upheld by a Justice Department grand jury investigating legal expenses related to the MOVE token issuance scandal.

The company was the core developer of the Movement Network, an Ethereum Layer 2 network, and completed a $38 million Series A round led by Polychain. The December 2024 MOVE token offering was in crisis due to a market maker sell-off, and Manche was fired after an internal investigation, and core development work was transferred to Move Industries.