Ousted founder’s $1.6 million claim tops Movement Labs’ bankruptcy filing
Quick Take
- Rushi Manche retained his 34.25% equity stake in Movement Labs after his termination following an investigation into the token launch dumping scandal.
- MVMT filed for bankruptcy earlier this month, reporting assets between $100,001 and $500,000 and liabilities of up to $10 million.
Movement Labs, the original core development company behind the Movement blockchain, filed for Chapter 11 bankruptcy earlier this month in the U.S. Bankruptcy Court for the District of Delaware, according to a post that surfaced on Tuesday.
In the filing, posted on July 15, the company reported assets between $100,001 and $500,000 and liabilities of up to $10 million. It listed up to 299 creditors, with the largest unsecured claim belonging to co-founder Rushikesh “Rushi” Manche at over $1.6 million.
Manche, who retains a 34.25% equity stake, previously sued the company in Delaware Chancery Court and won advancement of his legal fees related to a DOJ grand jury investigation into a MOVE token launch scandal.
MVMT Labs was the primary R&D firm behind the Movement Network, an Ethereum Layer 2 built on the Move programming language, which was developed initially for Meta’s defunct stablecoin project.
The company raised tens of millions, including a $38 million Series A led by Polychain, before its December 2024 (MOVE) token launch was derailed by a major scandal.
The controversy centered on a market-making agreement that gave an obscure entity called Rentech control of 66 million MOVE tokens — roughly 5% of the total supply. These tokens were rapidly dumped shortly after launch, triggering a sharp price crash and causing Binance and Coinbase to suspend trading.
A subsequent internal investigation led to the termination of Manche.
Following the scandal, MVMT restructured its operations, shifting core blockchain development work to Move Industries, led by Torab Torabi. The project pivoted toward becoming a sovereign Layer 1 blockchain with a focus on financial services for emerging markets, while the Movement Foundation conducted token buybacks to stabilize the ecosystem.
Torabi said Tuesday that Move Industries is not involved in MVMT’s bankruptcy.
Other notable MVMT claimants include the Delaware Division of Corporations, allegedly owed $459,000, Move Industries, Anchorage Digital, and auditing firm Ottersec, among others.
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