Storj Labs filed for voluntary Chapter 11 bankruptcy protection in the U.S. District Court for Northern West Virginia, revealing the move in a recent blog post. The company aims to tackle legacy debts while keeping its decentralized storage network running smoothly during the reorganization.
Storj assured customers that the network will continue operating normally without interruptions, pending court supervision. Its parent, Inveniam, remains supportive of the restructuring effort. Despite this, the STORJ token plunged about 18% in 24 hours, trading near $0.0608 with a market cap of roughly $26 million, according to CoinGecko. Bitcoin’s price remained largely stable over the same period.
Token Holders Could Gain Equity Stake
In an open letter to the token community, Storj outlined plans to include token holders in the equity of the reorganized company. The specifics such as eligibility and terms will be formulated during bankruptcy proceedings and disclosed formally. However, the company emphasized that this is an intention rather than a guarantee, subject to court approval and legal priorities among creditors.
Storj’s network continues functioning and the token’s role remains unaffected by the bankruptcy filing. Kaloyan Raev, Storj’s Director of Software Engineering, described the Chapter 11 move as a positive step, explaining that the underlying business is strong but weighed down by prior obligations.
This filing joins a wave of crypto-related bankruptcies and restructurings in July, including Movement Labs’ Subchapter V filing mid-month and Poolin’s Chapter 11 filing later on. Meanwhile, BitMEX and BitMart have opted for orderly wind-downs without formal bankruptcy.
