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Storj Labs files for Chapter 11 bankruptcy, STORJ token slides 16%
Storj said it expects no service interruptions as it seeks to resolve legacy obligations, and its plan would give token holders an ownership stake in the reorganized company.
Storj Labs, a decentralized cloud storage network, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of West Virginia, aiming to address legacy obligations while keeping its services running, according to CoinDesk. The company said it does not expect service interruptions and plans to continue operating the network. Storj said it is disposing of previous acquisitions and non essential operations as part of the restructuring.
Storj’s reorganization proposal includes a provision described as rarely seen in bankruptcy, where it would share ownership of the reorganized company among management, investors, and token holders. CoinDesk noted that token holders typically receive nothing in a standard Chapter 11 process. The filing comes amid a broader wave of crypto stress, with CoinDesk citing other recent failures or wind downs including BitMEX and BitMart closures and Movement Labs seeking Chapter 11 protection. The STORJ token fell 16% to about 6 cents, CoinDesk reported, and is down 79% over the past year and 98% from its March 2021 peak of $3.81.