BlockFills, a cryptocurrency lending firm, filed for Chapter 11 bankruptcy protection in Delaware, after reporting a $75 million loan loss and growing financial distress.

Dominion Capital sued BlockFills for misappropriation and concealment of losses, leading a U.S. federal judge to issue a temporary restraining order related to the dispute.

Before filing, BlockFills halted customer withdrawals, signaling liquidity problems and prompting creditor action that resulted in a court-ordered freeze of about 70.6 BTC of BlockFills' assets.

The company says it remains engaged with clients, creditors, investors, and other stakeholders throughout restructuring and emphasizes protecting client interests.

Experts question the likelihood of a successful reorganization, suggesting liquidation may be more probable given the losses and impairment of the core lending business.

Key legal questions focus on when management knew funds were impaired, what disclosures were made before withdrawals, and potential impacts on counterparties with open trades or collateral, all subject to automatic stay and contract structure exemptions.

The bankruptcy filing aims to enable restructuring while stabilizing operations and pursuing additional liquidity in collaboration with clients, creditors, and investors.

Co-founder and CEO Nicholas Hammer stepped down in February 2026; Joseph Perry was appointed interim CEO to oversee stabilization.

BlockFills hired BRG and Katten Muchin Rosenman for restructuring guidance and appointed Mark Renzi as chief transformation officer to support the process.

The bankruptcy process will be court-supervised in the District of Delaware, with ongoing transparency and stakeholder engagement planned.

Investors in BlockFills include Susquehanna Private Equity Investments and CME Group’s venture arm, with BlockFills describing its services as liquidity provision, trade execution, and lending.

BlockFills reported substantial business activity prior to filing, processing tens of billions in 2025 trading volume and serving over 2,000 institutional clients across many countries.