Decentralized cloud storage company Storj officially filed for Chapter 11 bankruptcy protection on July 27, extending a week-long streak of crypto industry failures. The company’s token dropped approximately 16 percent following the announcement.
In its filing, Storj stated that daily operations will continue uninterrupted despite entering bankruptcy proceedings. Management proposed an unconventional restructuring plan allowing token holders to convert their tokens into equity in the restructured company. This arrangement is extremely rare in US bankruptcy practice, reflecting the complex interplay between crypto assets and traditional creditor rights.
The move is seen as the latest signal of continued pressure on the crypto industry under the dual headwinds of high interest rates and tightening regulation.
Editor: GoodInfo Global News Team