Storj Labs filed for Chapter 11 bankruptcy protection in a federal court in West Virginia on Sunday, with case number 5:26-bk-00512. The decentralized storage company cited legacy liabilities from an earlier business phase that prevent growth, according to director of software engineering Kaloyan Raev. Chapter 11 bankruptcy protection allows a company to continue operating while a court supervises debt restructuring, with creditors receiving payment priority over equity holders.
Storj Labs Files Chapter 11 in West Virginia Federal Court
Storj Labs announced the voluntary financial restructuring on Sunday through a company blog post and social media statement. The filing targets legacy obligations that predate the company's current strategy, Raev stated in a letter to token holders.
"The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter," Raev wrote. Chief Executive Colby Winegar did not sign the letter.
The company maintains that its decentralized storage network continues operating across tens of thousands of storage locations in more than 100 countries. Data transfer functions remain unchanged, according to the announcement.
Company Proposes Equity Offer to STORJ Token Holders
Storj Labs plans to offer token holders equity in the reorganized company, though qualification rules have not been finalized. About 143.8 million STORJ tokens trade freely out of a total supply of 425 million tokens, with two-thirds of the supply held elsewhere.
The company's letter to token holders acknowledges that bankruptcy payment hierarchy places creditors before owners. "Storj's letter to token holders admits it can promise intent, not results," the source states.
A judge must approve the equity distribution plan before token holders receive any ownership stake in the restructured entity.
STORJ Price Falls 60% Since October 2025 Inveniam Acquisition
Inveniam Capital Partners announced its acquisition of Storj Labs on Oct. 22, 2025, with chairman and CEO Patrick O'Meara stating: "We're particularly excited to integrate the STORJ token into our ecosystem, driving greater utility and alignment across our platforms."
STORJ traded near $0.1872 on the acquisition announcement date. The token has declined approximately 60% since then, currently trading near $0.0745 with a 1.5% daily increase. Trading volume stands at $5.6 million with a market capitalization of $10.7 million.
![STORJ Price Performance. Source: BeInCrypto]()
MVMT Labs filed Chapter 11 bankruptcy in Delaware on July 15, providing a recent comparable case. Its Movement (MOVE) token reached a record low of $0.00964 ten days after the filing.
Storj Labs stated it will share court dates as they become available. The specific terms of the equity offer will determine the actual value token holders receive through the restructuring process.
FAQ
What did Storj Labs file on Sunday?
Storj Labs filed for Chapter 11 bankruptcy protection in a federal court in West Virginia on Sunday, with case number 5:26-bk-00512. The company cited legacy liabilities from an earlier business phase as the reason for the filing.
How much has STORJ token price fallen since the Inveniam acquisition?
STORJ token price has declined approximately 60% since Inveniam Capital Partners announced its acquisition of Storj Labs on Oct. 22, 2025. The token traded near $0.1872 on the acquisition date and currently trades near $0.0745.
