CoinDesk
Movement Labs, the developer behind the Movement blockchain, has filed for Chapter 11 bankruptcy, ending a turbulent year defined by a MOVE token market-making scandal, an internal investigation and a strategic pivot that never gained traction. The Ethereum layer-2, built using Meta's Move programming language, will continue operating while it restructures under court supervision.
The unraveling began in December with MOVE's launch. An April CoinDesk investigation found Movement was examining whether it had been misled into a market-making agreement that allowed 66 million MOVE tokens to be sold into the market a day after debut, triggering a sharp price decline. The arrangement centered on Rentech, an intermediary linked by documents to Chinese market maker Web3Port; Movement executives later questioned whether the foundation knew Rentech was not actually affiliated with Web3Port. Rentech has denied any wrongdoing.
Why it matters
The fallout dragged in the broader market. Binance banned the market-making account tied to the launch, Movement launched a token buyback, and hired Groom Lake to review the deal. Co-founder Rushi Manche separated from the company in May 2025. Each step narrowed the runway for a project that had originally pitched itself as a faster, cheaper home for Move-based smart contracts on Ethereum.
In June, Movement announced a strategic reset, pivoting away from Ethereum scaling competition toward cross-border payments, remittances and stablecoin settlement, claiming licensed payment infrastructure access across the U.S., Canada and the EU. That pivot now sits inside the Chapter 11 process, with the future of the blockchain network, partnerships and emerging-markets expansion plans unclear.
Market impact
Chapter 11 allows Movement to keep operating through restructuring, but the MOVE token and the underlying network face prolonged uncertainty. The case is the latest high-profile collapse in a layer-2 sector that has seen heavy competition and thinning retail appetite, and it lands as a warning shot for any project that routes token float through a single opaque counterparty.
Frequently asked questions
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Why did Movement Labs file for Chapter 11 bankruptcy?
The filing caps a year of governance and market-making turmoil that included a controversial deal allowing 66 million MOVE tokens to be sold shortly after launch, a Binance ban on the counterparty, the exit of co-founder Rushi Manche and a June pivot to payments that had not gained traction.
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What was the MOVE token market-making controversy?
An April CoinDesk investigation found Movement was examining whether it had been misled into a market-making agreement that let a single counterparty sell 66 million MOVE tokens into the market one day after the token debuted, contributing to a steep price decline.
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Who is Rentech and what role did it play in the scandal?
Rentech is the intermediary at the center of the market-making deal. Documents tied it to Chinese market maker Web3Port, and Movement executives later questioned whether the foundation believed Rentech was actually affiliated with Web3Port. Rentech has denied any wrongdoing.
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What was Movement's payments pivot before the bankruptcy?
In June 2025, Movement announced a shift away from Ethereum scaling competition toward cross-border payments, remittances and stablecoin settlement, claiming licensed payment infrastructure access in the U.S., Canada and the European Union.
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Will the Movement blockchain keep running during Chapter 11?
Chapter 11 allows the company to continue operating while it restructures under court supervision, but the future of the blockchain network, its partnerships and its payments expansion plans remains unclear.
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