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Movement Labs files for Chapter 11 after MOVE token controversy

In its filing, Movement Labs said it has under 1,000 creditors, assets between $100,000 and $500,000, and liabilities above $1 million.

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CoinDesk reports that Movement Labs, the developer of the Movement blockchain, has filed for Chapter 11 bankruptcy following months of turmoil tied to the MOVE token. According to CoinDesk, the company’s problems followed a market-making arrangement that facilitated the rapid sale of 66 million MOVE tokens shortly after the token debuted, which contributed to a steep price decline and prompted investigations and a token buyback program.

CoinDesk also reports that Movement was examining whether it had been misled into signing the market-making agreement, with internal documents reviewed by the outlet indicating that a single counterparty gained unusual influence over MOVE’s circulating supply. The controversy involved an intermediary, Rentech, connected to contracts associated with Chinese market maker Web3Port, and Movement executives later questioned whether a foundation believed Rentech was affiliated with Web3Port.

In its bankruptcy filing, Movement Labs said it had under 1,000 creditors, assets between $100,000 and $500,000, and liabilities above $1 million. CoinDesk adds that Binance banned the market-making account involved in the token launch for misconduct and that Movement hired outside firm Groom Lake to review the events around the deal, with the project built as an Ethereum layer-2 using the Move programming language.

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