The controversy centered on Rentech, a little-known intermediary that appeared in contracts connected to Chinese market maker Web3Port. According to documents obtained by CoinDesk, Movement executives later questioned whether the foundation believed Rentech was affiliated with Web3Port when it was not. Rentech has denied any wrongdoing or misrepresentation.
The fallout extended beyond Movement. Binance banned the market-making account involved in the token launch for what it described as misconduct, while Movement launched a token buyback program and hired outside firm Groom Lake to review the events surrounding the deal.
Movement Labs and co-founder Rushi Manche separated in May 2025.
More recently, the company attempted to chart a new course.
In June, Movement announced it would pivot away from competing with other Ethereum scaling networks and instead focus on cross-border payments, remittances and stablecoin settlement. The company said it had secured access to licensed payment infrastructure in the U.S., Canada and the European Union as it sought to build services aimed at emerging markets.
The strategy reflected a wider trend across the crowded layer-2 sector, where blockchain projects have increasingly shifted toward real-world financial applications as competition among scaling networks has intensified.
It remains unclear how the Chapter 11 filing will affect Movement’s blockchain network, its partnerships or plans to expand its payments business. Chapter 11 bankruptcy allows companies to continue operating while restructuring their debts under court supervision.
