Storj Labs, the company behind the decentralized cloud storage network that pays users to rent out unused disk space, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of West Virginia. The company says day-to-day operations will continue without interruption while it restructures.
News of the filing sent the STORJ token down 16% to roughly 6 cents. Trading volume spiked to about $20 million over the day, a striking figure against a total market value of only around $27 million for the token.
An Unusual Restructuring Proposal
Rather than the conventional bankruptcy path of wiping out equity and token holders alike, Storj is proposing to share ownership of the restructured business among management, investors, and existing token holders. That arrangement, if approved by the court, would be unusual for a crypto-adjacent bankruptcy.
The business underneath is strong and right-sized. What holds it back are legacy obligations from an earlier chapter.
The company, which was acquired by Inveniam in 2025, said it is divesting prior acquisitions and non-essential operations as part of the broader cleanup effort tied to the filing.
Part of a Rough Week for Crypto Infrastructure
Storj's filing lands in the middle of a difficult stretch for crypto-native businesses. BitMart recently announced a wind-down of its exchange operations, sending its BMX token down 58%, while derivatives platform BitMEX is shutting down entirely after 11 years, with daily volume down to roughly $400,000 and its BMEX token off more than 90%. Movement Labs also filed for Chapter 11 protection earlier in the week, on July 21.
Related: BitMart Withdrawals Slow to a Crawl as Exchange Begins Wind-Down
A Steep Long-Term Decline
Even before this week, STORJ had been under sustained pressure. The token is down 79% year-to-date and has fallen 98% from its all-time high of $3.81, reached in March 2021. The bankruptcy filing formalizes what the market had already been signaling for months: legacy obligations, rather than the underlying storage business, are what Storj says it now needs to shed.
