Six cents. That's what's left of a token investors once bought in 2017 betting on a decentralized internet. Storj Labs, which runs a blockchain-based cloud storage network, has filed for Chapter 11 bankruptcy in a West Virginia court, and the STORJ token dropped 16% within hours of the news.
The pitch behind Storj was simple and, in its way, elegant: instead of building data centers, the company pays ordinary people and businesses for spare disk space, letting customers buy cheaper cloud storage in return. STORJ tokens are the currency that flows to those node operators. The company raised roughly $35 million early on — $30 million from a 2017 token sale that hit its target in a single week, plus several equity rounds backed by investors including Qualcomm Ventures.
Last fall, investment firm Inveniam acquired Storj, keeping it as a separate subsidiary. "The business underneath is strong and right-sized," said Kaloyan Raev, director of software engineering. "What holds it back are legacy obligations from an earlier chapter." Those old obligations are exactly what the company is trying to shed through the court process, alongside selling off pieces from past acquisitions that no longer fit.
The filing itself isn't the unusual part — BitMEX, BitMart, and mining pool Poolin all announced shutdowns just last week. What stands out is the restructuring plan: Storj wants to split ownership of the reorganized company among management, investors, and token holders. In a typical Chapter 11, token and equity holders usually walk away with nothing; here, they're being offered a stake instead. The catch is that the details — conversion terms, eligibility, valuation — haven't been worked out yet and won't surface until a formal plan clears the court.
STORJ is down nearly 80% over the past year and roughly 98% from its March 2021 peak of $3.81. Services will keep running without interruption during the proceedings. The open question is whether token holders actually see a payout, or whether the equity promise ends up as a line in a filing that never quite delivers.
