Decentralized storage protocol Storj has filed for Chapter 11 bankruptcy in the U.S. As one of the long-standing Web3 projects, many may be surprised by this news. Fortunately, Storj announced that the network and the STORJ token will continue to operate normally throughout the bankruptcy proceedings.

The primary cause for this filing is reported to be legacy debt. As part of its restructuring process, Storj has proposed a compensation plan to distribute a portion of future equity to existing STORJ token holders. However, there is still a long way to go, as the plan requires final court approval and must take into account the priority claims of other creditors.

It is bitter to see a project that is a pioneer of DePIN make this decision. This case serves as a prime example of how legacy debt risks can catch up with older crypto projects. Even if the network continues to function normally, token price volatility may increase until legal proceedings conclude, so it is advisable to calmly monitor court updates and creditor responses for now.

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