Storj Files for Chapter 11 Bankruptcy Amid Steep Token Price Drop

Decentralized cloud storage company Storj Labs has filed for Chapter 11 bankruptcy protection in the US, seeking to restructure its finances while keeping its business running without disruption.

The move is designed to deal with obligations that largely predate its current business strategy. Storj's management and board described it as an accelerated financial reorganization, allowing the company to address its historical liabilities through a transparent framework.

Despite having scaled back operations with a leaner team and tighter cost controls, Storj acknowledged that its historical liabilities could not be addressed through business growth alone. The company has received support from Inveniam, but the Chapter 11 process is necessary to resolve those obligations.

Storj reassured users and token holders that its decentralized storage network remains fully operational, and the utility of the STORJ token within the network has not changed as a result of the bankruptcy filing. The company intends to propose a mechanism allowing token holders to participate in the equity of the restructured business.