CoinDesk
Storj Labs filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of West Virginia, aiming to clear legacy obligations while keeping its decentralized cloud storage network running. The STORJ token dropped 16% to roughly $0.06, with about $20 million changing hands against a $27 million market cap, meaning close to the entire float turned over in a day. The token is now down 79% over the past year and 98% from its March 2021 peak of $3.81.
The filing lands at the end of a week that took out BitMEX, BitMart and Movement Labs in quick succession. BitMEX, the exchange that invented the perpetual swap, said on July 23 it would shut down after 11 years, with daily volume down to roughly $400,000 and its BMEX token off more than 90%. BitMart announced its own wind-down on Sunday, halting deposits immediately, ending trading on Aug. 26 and closing in January 2027, with BMX down 58% on the news. Movement Labs, the developer of the Movement blockchain, filed Chapter 11 on July 21, unwinding after the December launch of its MOVE token.
Why it matters
Storj's restructuring plan contains a provision rarely seen in bankruptcy: ownership of the reorganized company would be shared among management, investors and token holders, who normally have no legal claim on an issuer and receive nothing in Chapter 11. The company said the core network is "strong and right-sized" and that what holds it back are legacy obligations from an earlier chapter. Inveniam, which acquired Storj last year, has endorsed the reorganization and continues to back the business.
The pattern is the story. Investor capital and attention have moved decisively toward artificial intelligence, leaving marginal crypto businesses with fewer places to raise and fewer buyers when they need an exit. BitMEX's parent HDR Global Trading was explicit that the exchange was solvent and that assets exceeded liabilities; it pointed instead to a strategic review triggered by roughly $200 million in regulatory fines and a sale process that found no buyer.
Market impact
Token holders across the failed cohort absorbed the pain.
Frequently asked questions
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What did Storj file for and where?
Storj Labs filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of West Virginia to address legacy obligations while continuing operations.
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How much did the STORJ token drop on the news?
STORJ fell 16% to roughly $0.06, with about $20 million changing hands against a $27 million market cap, meaning close to the entire float turned over in a day.
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What is unusual about Storj's restructuring plan?
Storj said it plans to share ownership of the reorganized company among management, investors and token holders, who normally have no legal claim and receive nothing in Chapter 11.
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Which other crypto firms failed or wound down this week?
BitMEX announced a July 23 shutdown after 11 years, BitMart said it would wind down on Sunday and close by January 2027, and Movement Labs filed Chapter 11 on July 21.
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Why are crypto firms failing right now?
The common thread is capital migration toward AI, leaving marginal crypto businesses with fewer places to raise and fewer buyers when they need an exit, compounded by regulatory fines and failed sale processes.
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