Decentralized cloud storage provider Storj Labs has filed for Chapter 11 bankruptcy protection. The company plans to continue network operations and explore a court-approved ownership mechanism for STORJ tokenholders.
Storj's bankruptcy filing and its exploration of an equity pathway for tokenholders represent a significant test for utility token holders' participation in corporate restructuring within the crypto industry.
Decentralized cloud storage provider Storj Labs has filed for Chapter 11 bankruptcy protection, citing substantial legacy liabilities. The company stated its intention to keep its network and customer services operational throughout the restructuring process, which will be subject to court oversight. Storj also plans to propose a mechanism for STORJ tokenholders to participate in the equity of the reorganized company, though details regarding eligibility and allocation remain undisclosed and subject to bankruptcy priorities and court approval.
The company indicated that its liabilities largely predate its current strategic direction. The STORJ token experienced no significant immediate price movement following the announcement, trading around $0.072. Storj, one of the longer-running decentralized infrastructure projects, began in 2014 as a peer-to-peer cloud storage network.
This filing occurs in a month that has seen other crypto entities seek bankruptcy protection, including Movement Labs and Bitcoin mining pool Poolin. Separately, BitMEX announced its intention to shut down but is pursuing an orderly wind-down rather than bankruptcy.