Storj Labs has filed for Chapter 11 bankruptcy reorganization in West Virginia, USA. The company disclosed that this move is primarily to deal with legacy debts from earlier years, and existing storage services will continue to operate without expected disruptions.
The restructuring plan includes token holders
The company disclosed that the restructuring plan intends to distribute ownership of the restructured company to management, investors, and token holders. According to common practice under Chapter 11 in the United States, token holders typically do not have legal claims against the issuer and often do not receive any restructuring distributions; therefore, this arrangement is relatively rare.
Storj is a decentralized cloud storage company that rents idle hard drive space from individuals and businesses for a fee, rather than building its own large data centers. The company states that its current business is still operational, with the drag primarily stemming from historical burdens incurred in earlier stages.
Disposal of non-core businesses
Storj also stated that Inveniam, the company that acquired it last year, supports the restructuring and will continue to provide support. At the same time, the company is disposing of some previously acquired assets and non-core businesses to streamline its structure and focus resources.
STORJ fell by about 16%.
Following news of its bankruptcy reorganization, the STORJ token fell approximately 16% to around $0.06. According to reports, the trading volume that day was close to $20 million, while its market capitalization was approximately $27 million, indicating a large-scale turnover of the token in a short period.
Over the past year, STORJ has fallen by 79%, a drop of about 98% from its high of $3.81 in March 2021.
The fourth accident within 7 days
Storj's filing makes it the fourth crypto company in the past seven days to announce failure, closure, or reorganization. Previously, Movement Labs filed for bankruptcy protection; BitMEX and BitMart also announced the closure of their operations.
BitMEX announced on July 23 that it would cease operations after 11 years. Its parent company stated that the platform was not insolvent, but decided to close after incurring approximately $200 million in regulatory fines and failing to find a buyer during the sale process. BitMart has stopped accepting new deposits and trading orders and plans to complete its shutdown in January 2027.
Additional information:The report mentions that funding and market attention are continuing to shift towards AI, making it more difficult for some crypto edge businesses to secure funding and find buyers when exiting the market.
