Storj Labs has filed for Chapter 11 bankruptcy protection after raising about $35 million through venture funding, grants and its 2017 STORJ token sale.

The company filed the case on July 26 in the U.S. Bankruptcy Court for the Northern District of West Virginia under case number 5:26-bk-00512.

According to Storj’s official restructuring announcement, the filing aims to address older financial obligations while allowing the decentralized cloud storage company to continue operating. Storj said customer services, its network and its main business would continue during the court process, subject to bankruptcy rules and court approval.

Storj seeks to address legacy debt

Storj described the Chapter 11 case as a restructuring rather than a shutdown. The company said it plans to continue normal operations while it works through debts linked to an earlier stage of the business. However, the announcement did not provide a full list of assets, liabilities or creditors.

Kaloyan Raev, Storj’s director of software engineering, said the business was “strong and right-sized” but remained held back by “legacy obligations from an earlier chapter.” The statement reflects the company’s position, but the bankruptcy court will still review its finances, creditor claims and any proposed reorganization plan.

Storj also said it has narrowed its focus to its core cloud business. It is disposing of earlier acquisitions and non-essential operations as part of that process. Inveniam supports the restructuring and said the company should return its attention to distributed storage, compute and file-access services.

Inveniam announced an agreement to acquire Storj in October 2025. The companies said Storj would remain a separate legal entity and operate as an Inveniam subsidiary. They also said existing customer, supplier and community relationships would remain in place.

Services expected to continue during Chapter 11

Storj said it “does not anticipate any interruptions” to customer services during the bankruptcy process. That wording expresses an expectation rather than a guarantee. The company must continue meeting its obligations under bankruptcy law, and some business decisions may require approval from the court.

The Storj network uses independent storage providers to supply unused storage capacity. Customers can access distributed cloud storage through tools designed to work with common business systems. The STORJ token supports payments across parts of the network, including compensation for node operators who provide storage and bandwidth.

The company’s official website continued to advertise cloud storage, file access and compute products after the filing. Storj has not announced changes to the token’s network role. Still, the bankruptcy concerns Storj Labs as a company, and the court process may shape its ownership, finances and business structure.

Before the filing, Storj had also adjusted parts of its cloud storage business. The company announced new storage and egress prices that took effect on July 1, 2026, while maintaining separate terms for some customers using older plans.

Token holders may join ownership proposal

Storj said management, community members, STORJ holders, current investors and possible new investors could share ownership of the reorganized company. The announcement described this as a plan, not a completed arrangement. It did not state how many token holders could qualify or how ownership would be allocated.

Any ownership proposal must appear in a formal Chapter 11 plan and receive the required creditor support and court approval. Storj has not disclosed conversion terms, eligibility rules, valuation details or a timetable. Therefore, holding STORJ does not currently give a confirmed right to shares in the reorganized business.

The proposed structure differs from the court-supervised asset-sale approach used by some other crypto companies. As crypto.news reported, Poolin entered Chapter 11 while pursuing a sale of its Texas bitcoin mining assets. The mining company reported about $173.1 million in obligations before filing.

Similarly, Movement Labs filed for Chapter 11 in July with liabilities that could reach $10 million. Meanwhile, a separate developer said work on the Movement blockchain would continue despite the original company’s bankruptcy case.

Storj raised about $35 million before filing

Storj completed a $30 million STORJ token sale in May 2017. The sale reached its target in seven days, although the company had initially scheduled it to remain open until June 19. Participants received STORJ tokens that they could use within the storage ecosystem.

The company also raised traditional funding before and around the token sale. Storj announced a$3 million seed round in February 2017 to support development of its distributed cloud storage platform. The round included investors linked to Qualcomm Ventures and Techstars.

CB Insights funding data places Storj’s total equity funding at about $5.05 million across six rounds. Combined with the token sale, the publicly reported amount reaches roughly $35 million.

Inveniam’s October 2025 acquisition announcement said Storj would retain its existing services, leadership and community relationships. It also said the STORJ token would remain part of the company’s decentralized infrastructure.

The bankruptcy filing came about nine months after that acquisition announcement. Storj has not yet released a full reorganization plan, detailed creditor schedule or final ownership terms. Future court filings should provide more information about its debts, available financing, asset sales and the proposed role for token holders.

WEMIX confirmed that an attacker took control of owner privileges linked to its WEMIX$ stablecoin contract on July 26.

The access allowed the attacker to create tokens without approval and move assets through several blockchain networks. An early Korean report valued the abnormal issuance and transfers at about $6.25 million. A later WEMIX update gave a more detailed figure of roughly 5.23 million WEMIX$ minted.

The company said the incident began at about 9:17 UTC, or 6:17 p.m. in South Korea. WEMIX identified suspected attacker wallets and asked exchanges and stablecoin issuers to help freeze the assets. It also started tracing the transactions with blockchain security companies. The cause of the owner-privilege compromise remains under investigation, and WEMIX warned that its initial figures may change.

Attacker converts minted WEMIX$ into other assets

According to WEMIX’s official incident update, the attacker issued about 5,225,525 WEMIX$ without permission. The attacker then converted the tokens into 30,736 WEMIX and 724,198.27 USDC.e. This official breakdown differs from the first $6.25 million estimate, which covered the wider abnormal issuance and movement reported on-chain.

The attacker bridged USDC.e to Ethereum and BNB Smart Chain before swapping parts of the funds into assets including ETH and USDT. Some assets also reached centralised exchanges. WEMIX said several exchanges had frozen linked addresses after receiving requests for help. However, the company has not named those exchanges or stated how much money remains frozen, recoverable or under attacker control.

The company has not said whether ordinary user balances were directly affected. It also has not published a full list of compromised contracts, transaction hashes or recovery amounts. Those details matter because the nominal value of tokens created does not equal the amount successfully converted and removed. WEMIX said its review now continues across several networks.

WEMIX suspends bridges and affected services

WEMIX temporarily stopped all bridges connected to the WEMIX3.0 network. The suspension covered Chainlink CCIP and the PLAY Bridge. The company also paused trading in affected liquidity pools, removed foundation-provided liquidity and stopped the WEMIX$ Module and PNIX decentralised exchange. These steps aimed to block additional transfers while the team reviewed contract permissions and related systems.

In its first notice, WEMIX said it had confirmed abnormal transactions and was “currently analysing the cause of the incident and taking emergency measures.” The company said it would publish more findings as investigators confirm them. It also asked users to rely on official channels instead of unverified posts. WEMIX may contact law enforcement agencies if tracing work identifies evidence that requires formal action.

Stablecoin loses peg during planned USDC.e transition

WEMIX$ was designed to track the U.S. dollar on the WEMIX3.0 network. CoinGecko data showed the stablecoin falling close to its recorded low after the breach, with a weekly decline of about 98.9%. The price move followed the unauthorised minting and rapid conversion of newly created tokens, although the final financial loss remains separate from the amount minted.

The incident came while WEMIX was already replacing WEMIX$ with USDC.e across its gaming and financial services. In March, the company announced that WEMIX PLAY would change its base currency from WEMIX$ to USDC.e. It scheduled the main service transition for April and began closing or reorganising older WEMIX$ pools. The breached contract therefore belonged to a stablecoin system already moving toward reduced use.

New breach follows the 2025 Play Bridge hack

The latest event follows a separate WEMIX security breach in February 2025. As crypto.news previously reported, attackers removed about 8.6 million WEMIX tokens, then worth roughly $6.04 million, from the Play Bridge Vault. WEMIX shut the affected server and reported the case to the Seoul Metropolitan Police Agency’s cyber investigation unit.

That earlier incident also led to criticism because WEMIX disclosed it several days after discovering the breach. South Korea’s major exchanges later delisted WEMIX in June 2025. As related crypto.news coverage noted, Upbit, Bithumb, Coinone, Korbit and Gopax coordinated the action through the Digital Asset Exchange Alliance. The new contract breach occurred as the project approached the period when a future domestic relisting application could become possible.

WEMIX has not released a final attack report, named the source of the stolen owner credentials or confirmed the total unrecovered loss. Its latest response focuses on wallet tracing, service suspensions, asset-freeze requests and contract analysis. Further notices are expected to clarify whether the attacker exploited code, obtained a private key or accessed an internal account with contract-control rights.

BitMart’s planned wind-down is starting to show up in customer withdrawal behavior, according to blockchain monitoring and ongoing user reports. While withdrawals remain available, analytics tracking suggests activity has slowed sharply after the exchange moved toward ending services.

On Monday, Lookonchain reported that only 58 wallets withdrew roughly $805,000 over more than 24 hours, and that BitMart had not processed any withdrawals during the most recent eight-hour window the firm tracked. Separately, multiple users on X described delays or inconsistencies with withdrawal processing, though the claims could not be independently verified.

Key takeaways

• Lookonchain data indicates withdrawal activity from BitMart slowed to near-zero during at least one tracked eight-hour period.
• Users on X reported withdrawal freezes and transactions marked as completed without clear on-chain processing, but these reports were not verified.
• BitMart has said withdrawals will continue, though requests may undergo additional compliance and security checks.
• BitMart’s closure schedule remains under focus: trading is set to end Aug. 26, with full cessation expected by Jan. 31, 2027.
• BitMart’s token (BMX) continued to fall after the shutdown announcement, reflecting deteriorating market sentiment.

Withdrawal activity appears to stall as wind-down proceeds

Lookonchain’s Monday update framed the slowdown through wallet-level monitoring, with 58 wallets withdrawing about $805,000 over a little more than a day. The same report said BitMart did not process withdrawals during the latest eight-hour segment it analyzed, suggesting operational throttling or slower throughput during the wind-down transition.

Beyond the analytics snapshot, social media users continued to post about withdrawal issues. One X user said they received an email claiming a USDT withdrawal had been completed, while their account still showed an “on-chain withdrawal freeze” and the transaction was not processed on-chain. Another user claimed a $30 test withdrawal remained pending for more than 30 minutes. These accounts were presented as individual experiences and were not confirmed by independent evidence in the reporting.

For customers, the practical question is whether BitMart can convert “orderly wind-down” promises into consistently processed outflows. Even when withdrawals remain technically enabled, delays can intensify concern—especially if customers suspect internal holds, address checks, or longer verification queues than before.

BitMart says withdrawals remain available, but checks may tighten

BitMart previously told customers that withdrawals would still be supported while operations unwind. However, it warned that withdrawal requests could face additional compliance and security controls. The exchange’s notice indicated that review processes may include checks of customer identity details, login devices, withdrawal addresses, trading history, and sources of funds.

BitMart also suggested it might request further proof, including identity verification, confirmation of address details, evidence relating to the source of funds, and—where relevant—ownership of the receiving wallet. That framework matters because it points to a mechanism for why withdrawals could appear slower even if the exchange intends to process them eventually.

Cointelegraph attempted to obtain comments from BitMart but did not receive a response before publication. That leaves customers and observers reliant on the exchange’s published guidance, third-party tracking, and user reports to gauge whether checks are running normally or becoming a bottleneck.

Trading ends in stages; platform closure timetable remains the same

The withdrawal scrutiny comes after BitMart announced a staged exit from its business. In its Sunday update, the exchange said it would stop accepting new registrations and deposits, while restricting new spot orders and futures positions.

According to the schedule outlined at the time, trading services are expected to end on Aug. 26. The exchange also stated that the platform will cease operations entirely on Jan. 31, 2027. This longer runway means BitMart’s ability to keep customer exits working—especially during the period leading up to Aug. 26—may be one of the clearest near-term signals of how smoothly it intends to handle assets.

As the wind-down progresses, blockchain visibility adds another layer to the story. Arkham, via its entity explorer, attributed about $69 million in crypto assets to BitMart-linked wallets on Monday, down from roughly $102 million on July 6. While wallet attribution does not automatically confirm which assets remain available to customers at any given moment, the trend is consistent with gradual movements and reallocations during the closure process.

BMX token slumps; acquisition questions return

BitMart’s token performance has also reflected mounting concerns around exchange risk. CoinGecko data showed BMX trading near $0.057 on Monday and down about 81.5% over seven days. Earlier in the week, the token was reportedly around $0.31 late Friday after BitMart’s shutdown plans became public.

Token declines during an exchange wind-down are common, but the magnitude can indicate how aggressively traders are repricing uncertainty around liquidity, support, and distribution mechanics during cessation. For tokenholders and observers, it also underscores the market’s expectation that the transition will not be smooth for all participants.

The closure has revived questions about consolidation in centralized exchanges. Changpeng Zhao, Binance co-founder, commented on X that acquiring a centralized exchange can be more complicated than buying other businesses. He argued that buyers could inherit security vulnerabilities, including backdoors left by prior teams, adding that acquisitions are possible but require greater scrutiny.

In that context, BitMart’s winding down may affect how potential acquirers evaluate operational continuity, customer asset handling processes, and technical risk. Even where an acquisition is feasible on paper, the practical challenges of verifying controls and safeguarding assets can be substantial—especially for platforms already reducing activity and limiting new access.

Looking ahead, customers and market participants should watch whether withdrawal processing returns to steady throughput as checks are completed and whether third-party monitoring shows sustained transaction activity rather than intermittent gaps. Until BitMart demonstrates consistent outflows across different assets and user reports, uncertainty around the final stages of the wind-down is likely to remain a central issue.