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BTC 
MOVE 
STORJ Decentralized cloud storage service provider Storj Labs filed for bankruptcy protection
Decentralized cloud storage service provider Storj Labs has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The company said it plans to keep the network running while restructuring legacy debt and explore ways to give STORJ token holders ownership.
On Sunday, Storj announced that it had filed a voluntary bankruptcy petition with the U.S. Bankruptcy Court for the Northern District of West Virginia. The company said that under court supervision, daily operations and customer services will continue to advance during the process, while its parent company Inveniam will continue to provide business support.
The reorganization could become an extraordinary test: whether utility token holders can participate in the ownership of a company restructured from bankruptcy.
In an open letter to the community, Storj said that most of its debt arose before the current strategy and was burdened with heavy burdens that could not be resolved by business growth alone. It pointed out that the network is still operating normally and the usefulness of the tokens has not changed.
According to CoinGecko's data, STORJ prices did not show obvious immediate reaction after the news was announced. As of the time of writing, the trading price was approximately US$0.072.
Storj explores equity path for token holders
Storj said management plans to propose a mechanism to allow token holders to participate in equity in the restructured company. However, Storj has not disclosed how it determines the eligibility of token holders, whether participation involves token snapshots or lockups, and how much equity may be allocated. The company acknowledged that any plan must follow bankruptcy priority and be approved by the court.
Storj was contacted for comment, but no response was received as of press time.
Storj is one of the longest-running decentralized infrastructure projects in the cryptocurrency industry. The project started in 2014 and is an open source point-to-point cloud storage project that aims to allow users to rent storage space from other network participants rather than relying on centralized providers.
Related developments
The same month Storj filed for bankruptcy protection, at least two other cryptocurrency companies sought Chapter 11 protection. Movement Labs filed an application under Subchapter V on July 15 after months of turmoil for its MOVE token; Bitcoin mining pool Poolin filed an application on July 22 seeking court-supervised sales of two of its Texas mines. In addition, BitMEX also announced in July that it would close after 11 years of operation, but the derivatives exchange did not file for bankruptcy, but chose to liquidate in an orderly manner after a strategic review.
