A crypto star project once valued at $3 billion has gone bankrupt, and its largest creditor is the founder it fired.
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A crypto star project once valued at $3 billion has gone bankrupt, and its largest creditor is the founder it fired.
The crypto industry's ability to write absurd scripts has once again surpassed all screenwriters.
Navigating Web3 tides with focused insightsBy: Xiao Bing
On July 15, 2026, the Delaware Bankruptcy Court received a Chapter 11 filing. The applicant, MVMT Labs, formerly known as Movement Labs, was once a star Ethereum Layer 2 project, led by Polychain, endorsed by the Trump family's World Liberty Financial, and rumored to be preparing a $100 million Series B round at a $3 billion valuation.
Bankruptcy documents show that the company's assets are now between $100,000 and $500,000, with liabilities up to $10 million and no more than 299 creditors.
Top of the creditor list is Rushi Manche, the co-founder fired by the company himself, with unsecured claims exceeding $1.6 million. He also holds 34.25% of the company's equity.
When a company goes into bankruptcy liquidation, the person it owes the most to is the founder it drove away.
The crypto industry's ability to write absurd scripts has once again surpassed all screenwriters.
How Glorious It Once Was
Movement Labs was founded in 2022. The two founders, Cooper Scanlon and Rushi Manche, were both in their early twenties. The project's tech narrative was very sexy: bringing the Move language into the Ethereum ecosystem. The Move language came from Meta's failed stablecoin project Diem, carrying the story arc of a "rise of the castoff from a major tech giant."
Capital quickly bought in. It secured a $3.4 million pre-seed round in 2023 and completed a $38 million Series A in April 2024, led by Polychain Capital, with cumulative funding of about $41.4 million. In January 2025, Fortune reported that the company was preparing a $100 million Series B round at a $3 billion valuation.
Greater endorsement came from politics. The Trump family's crypto project World Liberty Financial bought and publicly supported the MOVE token. During that narrative window of "American on-chain revival," Movement almost collected all the hot labels: Move language, L2, institutional capital, White House concept.
On December 9, 2024, MOVE listed on Binance, completing its moment in the spotlight.
The collapse began the very next day.
A "Worst Agreement Ever Seen" Contract
The day after listing, wallets linked to market maker Web3Port began dumping 66 million MOVE tokens, about 5% of the total supply, cashing out about $38 million. The token price plunged immediately.
CoinDesk's investigation in April 2025 revealed the inside story.
The transfer path of these tokens went through a previously digital footprint-less intermediate entity, Rentech. Contract documents show that Rentech played two roles in the same transaction: appearing on one side as an agent of the Movement Foundation, and signing on the other side in the name of a Web3Port subsidiary. The same company sat on both sides of the negotiation table.
The evaluation given by the foundation's legal counsel after review was that this "might be the worst agreement ever seen," yet the agreement was signed anyway.
The agreement also contained a cleverly designed clause: if the MOVE valuation reached $5 billion, Web3Port could liquidate the tokens, with profits split 50-50 with the foundation. Analysts' interpretation was direct: this was equivalent to writing "pump and dump" into the contract, and making the project foundation a party sharing profits from dumping the market.
According to reports by media such as Cointelegraph, the operator behind Rentech is Singaporean financial figure Galen Law-Kun. Rentech denied any false statements.
Dominoes
After the scandal was exposed, every link on the chain began to fall one after another.
Binance banned the involved market maker accounts. Coinbase suspended MOVE trading on May 15, 2025, citing that the token no longer met listing standards. The Foundation cut ties with Rentech and launched a $38 million USDT buyback plan, attempting to stabilize the market.
$38 million dump, $38 million buyback. The symmetry in numbers is nearly ironic: the project party used real money to buy back the quota that others dumped to cash out.
Personnel earthquake followed. Manche was first suspended, then fired. The company accused him of signing undisclosed agreements. Manche's counterattack was equally sharp: in July 2025, he sued his former employer in the Delaware Court of Chancery and successfully secured advancement of legal fees. This fee was directly related to the grand jury investigation by the U.S. Department of Justice surrounding the MOVE token issuance.
That $1.6 million claim likely came from here. The company's legal fee obligation incurred to fire him ultimately became the bill pressed at the very top of the bankruptcy documents.
Core development work was transferred to a new entity, Move Industries, led by Torab Torabi. The project direction also shifted from "Ethereum L2" to sovereign L1, focusing on cross-border payments and stablecoin settlement in emerging markets, and claiming to have accessed licensed payment infrastructure in the US, Canada, and the EU. This strategic adjustment sounded pragmatic, but the capital market did not give a second chance.
Autopsy Report
After news of the bankruptcy broke, the MOVE price hovered around $0.0108. Compared to the price range at the beginning of listing, the decline of this token needs to be described with the sentiment of "going to zero."
Torabi emphasized on X that Move Industries and MVMT Labs, which filed for bankruptcy, are independent legal entities. Chain development and operations are all normal, "we continue to keep our heads down and build." This set of separation rhetoric is not unfamiliar in the crypto industry: The company is dead, but the chain lives on; equity is zeroed out, but the foundation remains; the founders are gone, but the narrative continues under a new shell.
Reviewing the entire case, the things truly worth remembering are hidden in the timeline.
From Binance listing to market maker dump, the interval was one day;
From scandal exposure to founder suspension, the interval was about one week;
From star project to bankruptcy filing, the interval was nineteen months.
The speed at which the crypto market destroys a project is as fast as the speed it hypes it up.
There were no hackers, no absconding, no private key losses in this collapse. What killed Movement was a contract signed and sealed by its own people, a contract that legal counsel saw, knew was toxic, yet still became effective.
The industry spent many years building a security system to defend against external attacks. For attacks from a signing pen, there are still no audit tools.
The bankruptcy process will dispose of those assets of less than $500,000. The truly unliquidatable problem is left to the entire industry: Inside which star project's conference room is the next intermediary currently sitting, holding the "worst agreement in history" for signature?
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