Storj filed for bankruptcy protection on Sunday. The company says its network still works and STORJ tokens still work. Its owner made similar promises nine months ago.

Storj now wants to hand token holders a slice of the rebuilt company. But a judge must approve that. And creditors get paid first.

Why Storj Filed Chapter 11

Storj Labs filed in a federal bankruptcy court in West Virginia. The case number is 5:26-bk-00512.

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Chapter 11 is not a shutdown. It lets a company keep trading while a court helps it clear its debts.

Storj says those debts are old. They came from an earlier phase of the business. The company cannot grow its way out of them.

“The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter.”

That was Kaloyan Raev, Storj’s director of software engineering. He also signed the letter to token holders, not Chief Executive Colby Winegar.

What It Means for STORJ Holders

Nothing changes for the token today, Storj says. Data still moves across tens of thousands of storage locations in more than 100 countries.

The company plans to offer holders equity in the new Storj. Equity means part-ownership. The rules for who qualifies have not been written yet.

Those rules will matter. About 143.8 million STORJ trade freely out of 425 million in total. Two-thirds of the supply sits elsewhere.

Bankruptcy also has a payment order. Creditors come before owners. Storj’s letter to token holders admits it can promise intent, not results.

The Warning Sign From October

Inveniam Capital Partners announced it was buying Storj on Oct. 22, 2025. It promised no changes to contracts, pricing, or leadership.

“We’re particularly excited to integrate the STORJ token into our ecosystem, driving greater utility and alignment across our platforms.”

That was Patrick O’Meara, Inveniam’s chairman and chief executive. STORJ traded near $0.1872 that day. It has fallen about 60% since.

A closer warning came this month. MVMT Labs filed Chapter 11 in Delaware on July 15. Its Movement (MOVE) token hit a record low of $0.00964 ten days later.

STORJ has held up so far. It trades near $0.0745, up 1.5% on the day. Volume is $5.6 million and market value is $10.7 million.

The wider sector is soft too. Storage and infrastructure tokens have lagged even as network usage grew.

Storj says it will share court dates as they land. But the fine print of the equity offer will decide what holders actually get.

Source: BeInCrypto