Decentralized cloud storage network STORJ has filed for Chapter 11 bankruptcy protection in a U.S. court.
On Monday, STORJ announced via X (formerly Twitter) that the bankruptcy protection filing is a strategic move to address existing debt issues and ensure business continuity. The company stated that once the reorganization process is complete, it plans to restructure the corporation into a model jointly owned by management, the community, STORJ token holders, and investors.
Launched in 2014, STORJ offers decentralized cloud storage services. This year has seen a wave of bankruptcies in the crypto sector, including Movement Labs (developer of MOVE), Bitcoin Depot (BTM, a Bitcoin ATM operator), BlockFi (a crypto lending platform), and Archblock (a stablecoin issuer).
Movement Labs had previously filed for bankruptcy protection on July 21. Industry analysts suggest that the company’s financial troubles may have been exacerbated by last year’s unfair trading controversy.
In 2022, Lucy Manché, co-founder of Movement Labs, entered into a contract with market maker Web3Port, leading to allegations of unfair trading practices. Web3Port reportedly received approximately 66 million MOVE tokens and initiated large-scale sell-offs, triggering a significant drop in market prices.
Although Movement Labs removed Manché from her position, the fallout from this incident severely impacted the token’s value. As a result, Coinbase, the largest U.S. cryptocurrency exchange, made the decision to delist the MOVE token.