Storj Labs, a decentralised storage provider, has filed for Chapter 11 bankruptcy protection in the United States.

Cointelegraph reported on July 27 that Storj Labs will keep its network running and continue customer service during the restructuring. It is also reviewing ways to allow STORJ token holders to participate in equity of the reorganised company.

Storj Labs said on July 26 it filed a voluntary petition for bankruptcy protection with the U.S. Bankruptcy Court for the Northern District of West Virginia. It said it will continue normal operations under court supervision, and its parent company, Inveniam, plans to keep supporting the business.

In an open letter to the community, the company said most of its debt was incurred before its current strategy and is too large to be resolved through business growth alone. It also said the network is operating normally and token utility is unchanged.

Management plans to propose a way for token holders to participate in equity of the reorganised company after the restructuring. It did not disclose eligibility criteria, whether a token snapshot or lock-up would apply, or the size of any equity allocation. The plan must follow priority rules in the bankruptcy process and requires court approval.

Storj Labs launched in 2014 as an open-source, peer-to-peer cloud storage project. It has emphasised a structure that borrows storage capacity from network participants rather than centralised providers.

Earlier, Movement Labs filed for Subchapter V on July 15 after confusion surrounding the MOVE token continued, and bitcoin mining pool Poolin filed for Chapter 11 on July 22. BitMEX announced in July it would shut its business, but it has not filed for bankruptcy protection and is moving toward an orderly wind-down after reviewing its strategy.