The Token Scandal and Market Collapse
Published 7/22/2026, 2:03:45 AM
Movement Labs (MVMT Labs, Inc.) filed for Chapter 11 bankruptcy protection on July 15, 2026, following a prolonged financial and legal crisis triggered by a December 2024 token scandal. The filing in the U.S. Bankruptcy Court for the District of Delaware (Case No. 26-11113) revealed that the company’s liabilities (estimated between $1 million and $10 million) far exceeded its remaining assets ($100,001 – $500,000) [Source: https://x.com/zippy257/status/2079727686336090156, https://x.com/BrutalDegenX/status/2079700563931860992].
The Token Scandal and Market Collapse
The primary catalyst for the firm's insolvency was the fallout from the MOVE token launch on December 9, 2024. Investigations revealed a controversial market-making agreement involving an intermediary called Rentech, which allowed for the immediate liquidation of a massive portion of the supply.
- The $38 Million Dump: One day after the token's debut, approximately 66 million MOVE tokens (5% of the total supply) were sold into the market, generating a $38 million selloff [Source: https://x.com/CryptoJPTrans/status/2079641475290165297].
- Price Impact: The MOVE token price collapsed from an all-time high of $1.45 in December 2024 to approximately $0.0108 by July 2026, representing a 99% decline [Source: https://x.com/zippy257/status/2079727686336090156].
- Exchange Sanctions: Binance subsequently banned the implicated market-making account for misconduct, and Coinbase suspended MOVE trading in May 2025 [Note: not independently confirmed].
Internal Governance and Legal Failures
The scandal exposed deep fractures within the leadership team and allegations of undisclosed "shadow" agreements.
- Insider Allocations: Reports surfaced that insiders, including "shadow advisor" Sam Thapaliya (CEO of Zebec), were promised significant undisclosed token allocations [Source: https://x.com/CryptoJPTrans/status/2079641475290165297].
- Executive Ouster: Co-founder Rushi Manche was terminated in May 2025 following an internal investigation into the launch. Manche later sued the company for the advancement of legal fees related to a U.S. Department of Justice (DOJ) grand jury investigation into the MOVE launch [Source: https://x.com/morenafrica/status/2042356185517445574].
- Creditor Claims: Manche is currently the largest unsecured creditor in the bankruptcy filing, claiming over $1.6 million [Source: https://x.com/zippy257/status/2079727686336090156].
Financial Summary at Filing
The bankruptcy documents highlight the scale of the company's insolvency:
| Metric | Value / Detail | Source |
|---|---|---|
| Filing Date | July 15, 2026 | Source |
| Estimated Assets | $100,001 – $500,000 | Source |
| Estimated Liabilities | $1,000,000 – $10,000,000 | Source |
| Number of Creditors | 200 – 999 | Source |
| Largest Creditor | Rushi Manche ($1.6M+) | Source |
Current Status of the Protocol
While the original entity (MVMT Labs, Inc.) is in bankruptcy, the technology has been transitioned to a new entity called Move Industries, led by CEO Torab Torabi. Move Industries has pivoted the project to an independent Layer-1 blockchain focused on stablecoin payments and has explicitly stated it is a separate legal entity not involved in the MVMT Labs Chapter 11 proceedings [Source: https://x.com/Taro8573/status/2079731132967600403].