[DigitalToday reporter Chi-gyu Hwang (황치규)] Movement Labs, a developer of the Movement Ethereum layer-2, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. Cointelegraph reported on July 21 local time that Movement Labs will continue operating under court supervision as it restructures.

Court records show the bankruptcy protection filing was submitted on July 15 under Subchapter V. Subchapter V is a simplified rehabilitation process for small businesses that meet certain requirements. The court also approved interim requests allowing Movement Labs to maintain its bank accounts and cash-management system during the bankruptcy process and to receive debtor-in-possession financing to raise operating funds. The deadline for creditors to file claims is Sept. 14.

The filing comes amid continuing controversy over market making following the launch of MOVE, the Movement Network token, as well as the suspension of a co-founder and fallout from a token delisting.

Coinbase halted trading, judging that the MOVE token no longer met its listing standards. MOVE has fallen more than 94 percent over the past year to about $0.01.

The bankruptcy protection filing applies only to Movement Labs. Torab Torabi (토랍 토라비), chief executive of Move Industries, said in a post on X that development and operation of the Movement ecosystem, which Move Industries has taken over since December 2025, are continuing as normal.