On July 15, 2026, the Delaware Bankruptcy Court received a Chapter 11 application. The applicant, MVMT Labs, formerly known as Movement Labs, a former Ethereum Layer 2 star project, was led by Polychain, with the Trump family's World Liberty Financial on board, once rumored to be preparing for a $1 billion Series B financing at a $30 billion valuation.
The bankruptcy filing shows that the company's current assets are between $100,000 and $500,000, with liabilities of up to $10 million, and no more than 299 creditors.
At the top of the list of creditors is the company's co-founder Rushi Manche, who was fired by the company, with an unsecured claim of over $1.6 million. He also holds 34.25% of the company's equity.
When a company goes bankrupt, the person owed the most is its own ousted founder.
Once again, the cryptocurrency industry's ability to script absurdity has surpassed all screenwriters.
Once Glorious
Movement Labs was founded in 2022, with the two founders, Cooper Scanlon and Rushi Manche, both in their early twenties. The project's technical narrative was very appealing: bringing the Move language into the Ethereum ecosystem. The Move language originated from Meta's failed stablecoin project, Diem, and came with a story arc of "fallen giant's comeback."
Capital quickly bought in. In 2023, they secured a $3.4 million seed funding round, and in April 2024, completed a $38 million Series A round led by Polychain Capital, with total funding of about $41.4 million. In January 2025, Fortune reported that the company was preparing for a $1 billion Series B round at a $30 billion valuation.
Further endorsement came from the political arena. The Trump family's crypto project, World Liberty Financial, acquired and publicly endorsed the MOVE token. In that period of the "American on-chain renaissance" narrative, Movement nearly ticked all the boxes: Move language, L2, institutional capital, White House concept.
On December 9, 2024, MOVE made its debut on Binance, marking its shining moment.
The unraveling began the next day.
An "Seen Worst" Agreement
On the listing day, wallets associated with the market maker Web3Port started selling off 66 million MOVE tokens, approximately 5% of the total supply, cashing out about $38 million. The price of the coin plummeted as a result.
A CoinDesk investigation in April 2025 uncovered the inside story.
The circulation path of these tokens involved an intermediate entity, Rentech, which had no digital footprint before. Contract documents revealed that Rentech played two roles in the same transaction: appearing as an agent of the Movement Foundation on one side and signing on behalf of a Web3Port subsidiary on the other. The same company sat on both sides of the negotiating table.
The Foundation's legal counsel's assessment after review was that this was "possibly the worst agreement ever seen," yet the agreement was signed without hesitation.
There was also a cleverly designed clause in the agreement: if MOVE reached a valuation of $5 billion, Web3Port could liquidate the tokens, with profits split fifty-fifty with the Foundation. Analysts interpreted this straightforwardly as writing "pump and dump" into the contract and making the project foundation a party to the sell-off.
According to reports from Cointelegraph and other media, the mastermind behind Rentech was Singaporean financier Galen Law-Kun, although Rentech denied any misrepresentation.
A Domino Effect
After the scandal was exposed, every link on the chain began to fall.
Binance banned the implicated market maker's account. Coinbase halted MOVE trading on May 15, 2025, stating that the token no longer met listing standards. The Foundation severed ties with Rentech, initiating a $38 million USDT buyback plan in an attempt to stabilize the market.
A $38 million sell-off, a $38 million buyback. The numerical symmetry was almost ironic: the project team used hard cash to repurchase the amount others dumped for cash.
A personnel earthquake followed. Manche was first suspended, then fired, with the company accusing him of signing undisclosed agreements. Manche retaliated fiercely: in July 2025, he sued his former employer in the Delaware Chancery Court and successfully obtained advance payment of legal fees, a cost directly related to the U.S. Department of Justice's grand jury investigation into the MOVE token issuance.
That $1.6 million claim most likely came from here. The company's legal fee obligation resulting from his termination ended up being the top debt in the bankruptcy filing.
The core development work was transferred to a new entity, Move Industries, led by Torab Torabi. The project's focus also shifted from "Ethereum L2" to sovereign L1, emphasizing cross-border payments and stablecoin settlements in emerging markets, and claimed to have access to licensed payment infrastructure in the US, Canada, and the EU. While this strategic pivot sounded pragmatic, the capital markets did not give a second chance.
Autopsy Report
Following the bankruptcy news, the MOVE price hovered around $0.0108. Compared to the price range during its initial listing, the token's decline requires a sense of "reset" to describe.
Torabi emphasized on X that Move Industries and the bankrupt MVMT Labs are legally separate entities, with the chain's development and operations running as usual, "we continue to focus on building." This kind of narrative is not unfamiliar in the crypto industry: The company is gone, but the chain lives on; equity is wiped out, but the foundation remains; the founder has left, but the narrative continues under a new guise.
Reflecting on the entire case, the truly memorable aspects are hidden in the timeline.
From listing on Binance to market maker selling pressure, just one day apart;
From scandal exposure to founder stepping down, approximately a week apart;
From a star project to bankruptcy filing, a gap of nineteen months.
The speed at which the crypto market can destroy a project is as fast as the speed at which it can hype one up.
In this collapse, there were no hackers, no rug pulls, no lost private keys. What killed Movement was a contract signed by one of their own, a contract reviewed by legal counsel, known to be toxic, yet still enforced.
The industry has spent many years building a security framework to defend against external attacks, but there are still no audit tools for attacks coming from a pen stroke.
The bankruptcy process will liquidate assets of less than $500,000. The real unresolved issue left for the entire industry is: Which intermediary holding the "worst agreement in history" is now sitting in the boardroom of a prominent project?
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