Storj Labs Files for Chapter 11 Bankruptcy; STORJ Token Falls 16%

Storj Labs, the developer of the decentralized cloud storage platform Storj, has entered Chapter 11 bankruptcy proceedings to reorganize its outstanding legacy debt while keeping its business operational.

The company said the court-supervised restructuring is not expected to disrupt its services, with customers continuing to access the platform throughout the process. Once the reorganization is completed, ownership of the business is expected to be distributed among its management team, community members, STORJ token holders, and existing investors.

Founded to build a decentralized alternative to conventional cloud storage providers, Storj Labs financed its growth through both traditional investment and cryptocurrency fundraising. The company previously secured about $5 million from grants and conventional funding sources and raised approximately $30 million through its 2017 STORJ token offering.

The announcement triggered a sharp selloff in the project’s native cryptocurrency. STORJ declined 16.2%, changing hands at $0.06232 at the time of publication.

Source: GlobeNewswire