Key Highlights
- BlockFills filed for Chapter 11 bankruptcy in Delaware, reporting $50M–$100M in assets and up to $500M in liabilities.
- The firm froze client withdrawals and saw CEO Nicholas Hammer step down amid mounting liquidity pressure.
- Dominion Capital lawsuit alleges misappropriation and commingling of client funds, which may shape the bankruptcy proceedings.
Crypto trading and lending firm BlockFills has filed for Chapter 11 bankruptcy protection, marking the latest institutional casualty in the digital asset lending space. The filing caps weeks of escalating turmoil that saw the firm freeze customer withdrawals, face a federal restraining order, and lose its CEO.
Reliz Ltd., the entity that operates BlockFills, filed a voluntary petition on Sunday to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Three other related entities also filed for bankruptcy alongside Reliz.
According to the filing, BlockFills reported estimated assets of $50 million to $100 million and estimated liabilities of $100 million to $500 million, underscoring the scale of its financial distress.
In a statement released Sunday, BlockFills described the Chapter 11 process as “the most responsible path forward” following extensive discussions with investors, clients, and creditors.
The company said the filing would allow it to “stabilize the business, pursue additional sources of liquidity and recovery, and explore potential strategic transactions,” while maintaining that protecting client interests remains a priority.
What led to the filing?
The bankruptcy filing did not come out of nowhere. BlockFills had been under mounting pressure for weeks before Sunday’s petition.
In February, the firm suspended client deposits and withdrawals, citing “recent market and financial conditions” as it scrambled to address liquidity shortages and ongoing stakeholder negotiations. The freeze raised immediate concerns about the safety and accessibility of client funds, particularly among its institutional customer base.
Shortly after the withdrawal halt, Co-Founder and CEO Nicholas Hammer stepped down. The company’s website subsequently listed Joseph Perry as interim CEO. At the time, BlockFills was reportedly dealing with losses estimated at around $75 million.
The legal pressure then intensified further. Earlier this month, a U.S. federal judge issued a temporary restraining order against BlockFills in a lawsuit brought by Dominion Capital, temporarily freezing certain assets tied to the dispute.
Dominion accused BlockFills of misappropriating customer assets and refusing to return millions of dollars’ worth of crypto that Dominion had stored on the platform.
According to a February 27 court filing, BlockFills allegedly admitted during calls with clients in early February that customer assets were pooled with company funds on a single balance sheet, raising serious questions about fund segregation practices.
Scale of the business
Despite the financial distress, BlockFills was by no means a small operation. The Chicago-based firm offered services including liquidity provision, trade execution, and crypto lending to institutional clients.
According to its 2025 annual review, the company processed over $61 billion in transaction volume in 2025, up 28% from the previous year, and served over 2,000 institutional clients across more than 95 countries.
Its investor base further underscored its institutional positioning. BlockFills counts Susquehanna Private Equity Investments and CME Group’s venture arm among its backers, a combination of names that typically signals a well-connected player in the crypto-financial infrastructure space.
What happens now?
Chapter 11 allows a company to continue operations while restructuring its obligations under court supervision. BlockFills said it intends to use the process to implement an orderly restructuring, maintain transparency through the court-supervised proceedings, and explore strategic options, which could include a potential sale of the business.
For clients, the key question now is how their assets will be treated under the bankruptcy estate. In past crypto bankruptcy cases, such as Celsius and FTX, courts have had to examine whether customer crypto was held in custody or commingled with company funds, a distinction that determines whether clients are treated as asset owners or as unsecured creditors.
Given Dominion’s allegations that BlockFills pooled customer and company funds, this classification could become a central issue in the proceedings.
The filing adds BlockFills to a growing list of crypto lending and trading firms that have collapsed under the weight of liquidity mismanagement and opaque fund handling. From Celsius and Voyager in 2022 to the FTX fallout and now BlockFills, the pattern continues to expose structural weaknesses in the way crypto firms custody and deploy client assets.
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