Movement Labs files for Chapter 11 bankruptcy months after token scandal and strategic overhaul
Movement Labs has filed for Chapter 11 bankruptcy following a tumultuous period involving a controversial token launch and a failed strategic pivot. The company previously attempted to transition from an Ethereum scaling network to a cross-border payment service provider.
Why it matters
The collapse illustrates the volatility of the crypto market and the risks associated with market-making agreements and rapid business model changes.
The filing follows months of turmoil for Movement, an Ethereum layer-2 network built using the Move programming language, which was originally developed at Meta. The project launched with the goal of bringing Move-based smart contracts to Ethereum (ETH) while offering faster and cheaper transactions through a scaling network.
Its troubles began shortly after the December launch of the MOVE token.
An April 2025 CoinDesk investigation found that Movement was examining whether it had been misled into signing a market-making agreement that handed a single counterparty unusual influence over MOVE's circulating supply. Internal documents reviewed by CoinDesk at the time showed the arrangement allowed 66 million MOVE tokens to be sold into the market one day after the token debuted, contributing to a sharp decline in price.
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