Storj Files for Chapter 11 Amid Crypto Industry Woes

Cloud storage firm Storj Labs filed for Chapter 11 bankruptcy in West Virginia to address legacy obligations while pledging to keep services running. The company, which operates a decentralized cloud network that pays individuals and businesses to rent out unused disk space, does not expect service interruptions and will continue operating.

The restructuring plan proposes sharing ownership of the reorganized company among management, investors, and token holders. This is an unusual provision in bankruptcy proceedings, as token holders typically have no legal claim on an issuer and receive nothing in a Chapter 11 process.

Storj's STORJ token fell 16% to about 6 cents after the announcement. The token has been down 79% over the past year and 98% from its March 2021 peak of $3.81. Almost $20 million worth of the token changed hands against a market value of about $27 million, meaning close to the entire supply turned over in a day.