Movement Labs Files for Bankruptcy Amid MOVE Token Fraud Issues

Key Points of the Article

• Liabilities up to $10 million, assets up to $500,000
• Mr. Manche is the largest unsecured creditor, claiming over $1.6 million

Details of the Bankruptcy Filing

Movement Labs (corporate name: MVMT Labs), the core development company of the Movement blockchain, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware on July 15. This was revealed in court records made public on the 21st.

Chapter 11 is a U.S. bankruptcy procedure that allows for the reorganization of debts while continuing business operations, similar to Japan's Civil Rehabilitation Law. According to the filing, the company's assets are reported to be between $100,000 and $500,000, with liabilities of up to $10 million, and the number of creditors reaching a maximum of 299.

The largest unsecured creditor is co-founder Mr. Luc Manche, with claims exceeding $1.6 million. Mr. Manche holds 34.25% of the company's shares and has previously sued Movement Labs in Delaware Chancery Court after his dismissal, winning reimbursement for legal costs related to a U.S. Department of Justice grand jury investigation.

Other major creditors include the Delaware Division of Revenue (claiming approximately $459,000), Move Industries, cryptocurrency custody firm Anchorage Digital, and auditing firm OtterSec.

Origin of the MOVE Token Issues

Movement Labs, as the primary developer of the Ethereum Layer 2 network "Movement," based on the Move programming language developed by Meta (formerly Facebook), had raised tens of millions of dollars, including a $38 million Series A led by Polychains in April 2024. However, shortly after the issuance of the MOVE token in December 2024, allegations of fraud emerged, leading to a rapid decline in management.

At the core of the issue was a market-making contract that gave an obscure intermediary named Rentec control over 66 million MOVE tokens (about 5% of the total supply). These tokens were sold off massively the day after issuance, causing a sharp price drop. Binance and Coinbase subsequently suspended trading of MOVE.

An investigation reported by CoinDesk in April last year suggested that Rentec was involved through contracts related to the Chinese market maker Web3Port. While the Movement Foundation claimed it was unaware of the relationship between Rentec and Web3Port, Rentec denied any wrongdoing or misrepresentation.

Background of the Business Restructuring

In response to the series of issues, Movement Labs dismissed Mr. Manche in May 2025. The core blockchain development operations were subsequently transferred to Move Industries, a separate entity led by Mr. Trab Travi.

In June 2025, Move Industries announced its withdrawal from the Ethereum Layer 2 competition and proposed a shift to an independent Layer 1 blockchain focused on international remittances and stablecoin payments for emerging markets. The company claims to have secured access to payment infrastructure approved in the U.S., Canada, and the European Union.

Mr. Travi stated on the 21st that Move Industries is unrelated to the current bankruptcy filing.

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