Motion Labs has filed for Chapter 11 chapter with not more than $500,000 in belongings and liabilities that might attain $10 million following greater than a 12 months of turmoil across the MOVE token.
Abstract
- Motion Labs filed for Chapter 11 with as much as $10 million in liabilities.
- Rushi Manche holds its largest unsecured declare, value greater than $1.6 million.
- Transfer Industries says its operations and Motion blockchain improvement stay unaffected.
Court docket information present that MVMT Labs submitted its petition on July 15 within the U.S. Chapter Court docket for the District of Delaware. The unique developer of the Motion blockchain listed between $100,001 and $500,000 in belongings, as much as $10 million in liabilities and as many as 299 collectors.
Former co-founder and chief government Rushikesh “Rushi” Manche holds the biggest unsecured declare at greater than $1.6 million, in keeping with the submitting. The doc additionally names the Delaware Division of Firms, Transfer Industries, Anchorage Digital and safety auditor OtterSec among the many claimants, with the Delaware company allegedly owed $459,000.
Regardless of being faraway from the corporate in Might 2025, Manche nonetheless owns a 34.25% fairness stake in Motion Labs. He beforehand sued the corporate within the Delaware Court docket of Chancery and secured cost of authorized bills related to a U.S. Division of Justice grand jury investigation into the MOVE launch.
Motion Labs initially served as the principle analysis and improvement firm for Motion Community, which launched as an Ethereum layer-2 utilizing the Transfer programming language. Meta initially developed Transfer for its deserted Libra and Diem digital forex tasks.
Earlier than the token controversy, Motion Labs had attracted substantial enterprise funding. The corporate raised $38 million in a Sequence A spherical led by Polychain Capital, whereas Reuters reported in January 2025 that it was near finishing one other $100 million spherical at a proposed $3 billion valuation.
MOVE scandal left lasting harm
Motion Labs’ issues intensified after MOVE debuted on exchanges in December 2024. An investigation by CoinDesk discovered {that a} market-making settlement handed 66 million MOVE tokens, or about 5% of the availability, to a little-known middleman known as Rentech.
In accordance with inner paperwork reviewed by CoinDesk, wallets linked to market maker Web3Port bought the tokens at some point after MOVE’s trade debut and generated about $38 million. The sale positioned a big share of the publicly traded provide below one counterparty’s management and contributed to a steep fall within the token’s worth.
Scrutiny additionally fell on the construction of the settlement as a result of Rentech appeared in contracts each as a Motion Basis agent and as a Web3Port affiliate, CoinDesk reported. Rentech denied misrepresenting itself, whereas Motion co-founder Cooper Scanlon informed workers that the venture was analyzing whether or not it had been misled.
Reviewing the paperwork, crypto founder Zaki Manian argued that the phrases created incentives to boost MOVE’s valuation earlier than promoting tokens to retail merchants.
“Even collaborating in a dialogue the place that’s on paper is insane,” Manian informed CoinDesk.
Binance later banned the market-making account for what the trade described as misconduct and froze the earnings linked to the token gross sales. Motion Community Basis subsequently introduced a $38 million MOVE repurchase plan utilizing the recovered funds and employed outdoors agency Groom Lake to research the settlement.
Management adjustments adopted the inquiry. Motion Labs terminated Manche after alleging that he had signed undisclosed agreements, whereas the corporate transferred core improvement obligations to the newly shaped Transfer Industries below chief government Torab Torabi.
Buying and selling disruptions compounded the harm. The Block reported that Binance and Coinbase suspended MOVE buying and selling after the launch controversy, whereas TradingView information cited within the unique report positioned MOVE close to $0.0108 following the chapter information, with the token gaining lower than 1%.
Transfer Industries stays outdoors the submitting
Transfer Industries has denied any involvement within the Chapter 11 case and continues to function the blockchain individually from Motion Labs. Addressing the submitting on X, Torabi careworn that the 2 firms are distinct authorized entities.
“Transfer Industries is working usually. We proceed to place our heads down and construct.”
Motion Community Basis confirmed in December 2025 that Transfer Industries had develop into the community’s main service supplier and assumed its fundamental working duties. Underneath that association, the muse stays the impartial community steward, whereas Transfer Industries handles improvement, operations and ecosystem work.
Following the company separation, Transfer Industries transformed Motion from an Ethereum layer-2 into an impartial layer-1 community. The corporate has since positioned the chain as infrastructure for stablecoin funds, cross-border transfers and remittances in rising markets.
Motion Labs is the second outstanding crypto firm to hunt U.S. chapter safety in latest months. In Might, Nasdaq-listed Bitcoin Depot entered Chapter 11 within the Southern District of Texas to shut its crypto ATM enterprise and promote its belongings below court docket supervision.
In contrast to Motion Labs, Bitcoin Depot blamed tighter state guidelines, decrease transaction limits, litigation and enforcement stress for making its mannequin unsustainable. The corporate took greater than 9,000 kiosks offline and included its Canadian entities within the court-supervised course of, in keeping with its Might 18 announcement.
