Movement: An Ethereum layer 2 developer has gone bankrupt! A chain reaction of market makers dumping and the founder being suspended

Movement, the developer of an Ethereum layer-2 blockchain built on the Move language, Movement Labs, filed for Chapter 11 bankruptcy protection with the Delaware bankruptcy court on 7/15. The market maker dumped 66 million MOVE tokens, faced peer competition, and the founder was suspended from their position; the MOVE token has fallen more than 94% in one year.
(Background: Behind the Movement token crash: a secret contract and dual-sided market making leading to destruction)
(Additional context: Movement overhauled its innovation company after dismissing founder Rushi Manchet—can $MOVE still be saved after being cut in half over the past month?)

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• Bankruptcy details: filed on 7/15; creditors can file claims before 9/14
• Market maker dumps 66 million MOVE; the decline reaches 94%
• Investors, take note: does the “origin” advantage of the Move language still hold?

Movement Labs, the developer of an Ethereum layer-2 blockchain, has submitted an application for Chapter 11 bankruptcy protection to the U.S. Delaware district bankruptcy court, marking that this project—built on the Move language developed behind which the Sui founder is associated—has officially entered the reorganization stage.

Bankruptcy details: filed on 7/15; creditors can file claims before 9/14

According to court records, Movement Labs filed the application on July 15 through Subchapter V (a simplified reorganization process for small businesses). This means the company can continue operating normally during bankruptcy, but the debt restructuring will be carried out under the court’s oversight.

Last Monday, the court approved Movement Labs’ interim request, allowing the company to maintain its bank accounts, cash management system, and obtain debtor-in-possession financing to pay operating costs. Creditors must submit their claims by September 14.

Torab Torabi, CEO of Move Industries, confirmed on X that the bankruptcy applies only to Movement Labs. Move Industries, which took over Movement ecosystem development and operations in December 2025, is still operating normally.

Market maker dumps 66 million MOVE; the decline reaches 94%

In the months leading up to bankruptcy, Movement went through a chain of incidents driven by the MOVE token:

• May 2025: Movement Labs suspended founder Rushi Manchet. It was found that he had reached an agreement with the market maker Web3Port, under which the market maker received 66 million MOVE tokens (about 5% of the total token supply), and then sold them, creating downward pressure of about $38 million.
• In the same month: Coinbase paused MOVE trading, determining that the token no longer met listing standards.
• Over the past year: the MOVE token price has dropped more than 94%; it is currently about $0.01.

Investors, take note: does the “origin” advantage of the Move language still hold?

Movement uses the Move language. This programming language was originally designed for DiG digital currency by Facebook (now Meta)’s research team, and later became a core part of Sui and Aptos. Movement brings the Move language into the Ethereum ecosystem, enabling developers to build applications on Ethereum layer-2 by leveraging Move language’s memory-safety features.

If Movement Labs successfully reorganizes, the competitive landscape for the Move language in the Ethereum layer-2 track may further shrink. Currently, Ethereum’s layer-2 market already has more than 30 active projects, and Movement’s bankruptcy also reminds investors that even “well-backed” crypto projects can bring down the entire ecosystem due to market-maker manipulation and internal governance problems.