Storj Labs files for bankruptcy protection after raising $35 million

Storj Labs, the company behind the decentralised cloud storage network Storj, is voluntarily filing a Chapter 11 bankruptcy petition with the court in West Virginia. The aim is to resolve old financial obligations while day-to-day business operations continue as normal.

Restructuring to Settle Legacy Debts

Storj Labs reports via Business Insider that the restructuring is focused purely on handling debts from an earlier period, not on a full shutdown of the company. Customers are not expected to notice any impact from the process: services continue uninterrupted and existing obligations will be honoured, insofar as the bankruptcy court permits.

Kaloyan Raev, Director of Software Engineering at Storj, states that this is a deliberate and positive step. He says the company itself is strong enough, but that old obligations are standing in the way of growth. Through the Chapter 11 procedure, the company wants to settle those obligations in an orderly fashion and then move forward with a clean slate.

Previously Raised $35 Million Through Funding and Token Sale

Storj Labs raised a total of approximately $35 million. Of that sum, around $5 million came from traditional investments and grants, and roughly $30 million from the STORJ token sale in 2017. That token sale was one of the larger ones in the sector at the time.

After the restructuring, the plan is that management, the STORJ token community and investors will collectively become owners of the reorganized company. Storj aims to return to its decentralised roots and refocus entirely on serving customers with decentralised cloud storage.