This filing follows a series of challenges, including a contentious market-making agreement, an internal probe regarding its MOVE token launch, a ban by Binance related to its market maker, and a strategic shift from Ethereum scaling to cross-border payment solutions.
By Helene Braun, AI Boost|Edited by Nikhilesh DeUpdated Jul 21, 2026, 5:58 p.m. Published Jul 21, 2026, 5:54 p.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShow- Movement Labs, the creator of the Movement blockchain, has initiated Chapter 11 bankruptcy proceedings.
- The company faced scrutiny after a market-making agreement led to the rapid distribution of 66 million MOVE tokens, causing a significant price drop and triggering investigations and a token repurchase.
- Movement's recent shift towards cross-border payment services and stablecoin settlements is now uncertain, as the Chapter 11 process casts doubt on the future of its blockchain network, partnerships, and expansion plans, although operations may persist during the restructuring.
Movement Labs, the firm behind the Movement blockchain, has filed for Chapter 11 bankruptcy, representing a significant challenge for a crypto initiative that has spent the previous year dealing with governance issues, a market-making scandal, and a failed strategic redirection.
This filing follows a period of chaos for Movement, an Ethereum layer-2 network utilizing the Move programming language, which was originally developed by Meta. The project's aim was to introduce Move-based smart contracts to Ethereum (ETH) while providing quicker and more affordable transactions via a scaling network.
Problems arose soon after the MOVE token was launched in December.
An April 2025 CoinDesk investigation revealed that Movement was scrutinizing whether it had been misled into entering a market-making agreement that gave a single entity undue control over the circulating supply of MOVE tokens. Internal documents reviewed by CoinDesk indicated that this arrangement enabled the sale of 66 million MOVE tokens into the market just a day after their launch, leading to a steep price decline.
The controversy primarily involved Rentech, a lesser-known intermediary tied to contracts with the Chinese market maker Web3Port. According to documents obtained by CoinDesk, Movement executives later questioned whether they had mistakenly believed Rentech was connected to Web3Port when it was not. Rentech has denied any wrongdoing or misrepresentation.
The repercussions extended beyond Movement. Binance prohibited the market-making account associated with the token launch due to what it termed misconduct, while Movement initiated a token buyback initiative and enlisted the assistance of Groom Lake to investigate the circumstances surrounding the deal.
In May 2025, Movement Labs and co-founder Rushi Manche parted ways.
Recently, the company attempted to forge a new path.
In June, Movement unveiled plans to shift away from competing with other Ethereum scaling solutions, opting instead to concentrate on cross-border payments, remittances, and stablecoin settlements. The firm claimed to have gained access to licensed payment systems in the U.S., Canada, and the European Union as it aimed to develop services aimed at emerging markets.
This strategy mirrored a broader trend within the competitive layer-2 sector, where blockchain projects are increasingly focusing on real-world financial applications as competition among scaling networks intensifies.
The impact of the Chapter 11 filing on Movement's blockchain network, partnerships, and payment business expansion remains uncertain. Under Chapter 11 bankruptcy, companies are allowed to continue operations while restructuring their debts under court supervision.
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News- 1Claude's Fable 5 just solved an 87-year-old math problem, and it matters for bitcoin1 hour ago
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TRON Network - Q2 2026
TRON Network - Q2 2026
In Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.
By CoinDesk Research4 hours agoCommissioned byTronIn Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.
Why it matters:
In Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.
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