Finance Cloud storage provider Storj has initiated Chapter 11 bankruptcy proceedings, marking the fourth cryptocurrency-related company to encounter significant difficulties within a week. The value of its token has dropped by 16%.

The decentralized data storage provider asserts that it will maintain operations and is proposing a unique restructuring plan that allows token holders to acquire equity in the reformed business.

By Shaurya Malwa | Edited by Sheldon Reback July 27, 2026, 9:15 a.m. 2 min read

Storj has filed for Chapter 11 bankruptcy. (FuzzMartin/Getty Images)
  • Storj Labs, a decentralized cloud storage company, has filed for Chapter 11 bankruptcy in West Virginia to manage its legacy liabilities while assuring that its services will continue.
  • The restructuring plan suggests sharing ownership of the restructured company among management, investors, and token holders, a rare move in bankruptcy cases.
  • This filing caps a week marked by the solvent wind-downs of BitMEX and BitMart and the bankruptcy filing of Movement Labs, as interest and capital pivot away from crypto towards artificial intelligence.

Storj Labs has announced its Chapter 11 bankruptcy filing, joining three other crypto firms in a week facing operational failures as investor focus shifts to AI technologies.

This filing was made in the U.S. Bankruptcy Court for the Northern District of West Virginia and aims to address the legacy financial obligations from a prior period while ensuring business continuity. Storj has stated it does not anticipate any service disruptions.

In addition to Storj, Movement Labs, which developed the Movement blockchain, has also sought bankruptcy protection. Moreover, the crypto exchanges BitMEX and BitMart have announced their closures.

Storj operates a decentralized cloud storage network that compensates users for renting out unused disk space instead of maintaining its own data centers. The company was acquired by Inveniam last year, which supports the reorganization efforts. Storj plans to divest from previous acquisitions and non-essential operations.

Kaloyan Raev, director of software engineering at Storj, expressed, “The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter.”

The STORJ token experienced a significant decline of 16%, trading at approximately 6 cents. Nearly $20 million worth of the token exchanged hands, with a total market value around $27 million, indicating that nearly the entire supply was traded in a single day. Over the past year, the token has plummeted by 79% and is down 98% from its peak of $3.81 in March 2021.

Notably, the restructuring plan includes a provision that is seldom seen in bankruptcy cases: Storj intends to distribute ownership of the restructured entity among management, token holders, and investors.

Typically, token holders have no legal claims on an issuer and do not receive any benefits in a Chapter 11 process.

This bankruptcy filing follows a particularly tumultuous week in the crypto space. BitMEX, known for creating the perpetual swap, announced its closure on July 23 after 11 years of operation, citing a decrease in daily trading volume to around $400,000 and a drop of over 90% in its BMEX token value.

Its parent company, HDR Global Trading, insisted that the platform is not insolvent and that its assets exceed its liabilities, attributing the shutdown to a strategic review following approximately $200 million in regulatory fines and unsuccessful attempts to find a buyer.

BitMart also declared its own winding down on Sunday, ceasing new deposits and trading orders immediately, with all trading set to halt on August 26 and a complete closure scheduled for January 2027, following a 58% drop in its BMX token's value.

Movement Labs filed for Chapter 11 on July 21 after a tumultuous year, particularly following the problematic launch of its MOVE token last December.

The recent filings reflect a market landscape where investor capital and attention have increasingly gravitated toward artificial intelligence, leaving struggling crypto companies with limited options for fundraising and fewer potential buyers for exits.

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