Storj, the company behind the decentralized cloud storage network, has filed for Chapter 11 bankruptcy. The company said the Storj network itself will keep running during the bankruptcy process. It is also exploring a court-approved ownership mechanism for holders of its STORJ token.
Why Chapter 11?
Chapter 11 allows a company to reorganize its debts while continuing operations. Storj’s filing means the business is seeking protection from creditors while it works out a plan to restructure. The company did not disclose the amount of debt or assets involved in the filing.
Network Operations Continue
Storj emphasized that the decentralized storage network, which relies on a global community of node operators, will not be interrupted. Users can still upload and download files, and node operators will continue to earn payouts. The company said the network’s infrastructure is separate from the corporate entity that filed for bankruptcy.
Token Holder Proposal
Storj is exploring a court-approved mechanism that would give STORJ tokenholders a role in the bankruptcy process. The details of the proposal are still being worked out, but the company said it aims to create a structure that recognizes the value of the token ecosystem. The move is unusual because tokens are typically treated as unsecured claims in bankruptcy cases.
What’s Next
The bankruptcy court will need to approve any plan involving tokenholders. Storj has not yet filed a specific proposal. The company said it will provide updates as the process moves forward.
