Decentralized cloud provider Storj Labs announced the filing of a restructuring petition under Chapter 11 of the U.S. Bankruptcy Code. Against this backdrop, the Storj token (STORJ) fell over 16% in 24 hours, according to TradingView.
What is this company and why is restructuring needed?
Storj Labs was founded in 2014. The idea was to use the disk space of numerous computers as cloud storage instead of building data centers.
Such nodes in the company's infrastructure are called storage nodes. The storage volume of the first platform, launched three years later, reached 150 PB. However, the developers later decided to redesign the architecture.
In March 2020, Storj introduced the V3 platform under the Tardigrade brand, which remains operational to this day. The total amount of funding raised was about $5 million across several rounds.
In its statement, the company emphasized that its core business is "strong and optimally scaled." The restructuring, in turn, aims to address "some past issues" and reduce liabilities.
"This process allows us to resolve liabilities in an orderly manner and emerge with a clean slate — and with a plan that enables management, our token community, and investors to share ownership of the restructured company, returning Storj to its strong decentralized roots and ensuring service to our customers," said Kaloyan Rayev, Director of Software Development at the company.
What is STORJ?
The company launched its first token — SJCX — back in 2014 via crowdfunding on Counterparty. It raised 910 BTC, a little over $460,000 at the time. The issuance amounted to 500 million SJCX.
In 2017, the company migrated to the Ethereum blockchain, and the asset was reissued as STORJ based on the ERC-20 standard.
From the Storj Labs statement, it follows that token holders will be entitled to a stake in the restructured company, but the organization did not provide details.
Despite this, the news had a negative impact on the STORJ price. The asset fell over 16%, according to TradingView data, to $0.06. Its all-time high was set in 2021 above $2.8.
Notably, this is not the first crypto-related project to announce restructuring. The industry continues to consolidate. Previously, we reported on the closure of two major crypto exchanges — BitMEX and BitMart.
