Crypto Lender Blockfills Files for Chapter 11 Bankruptcy

Institutional cryptocurrency trading and lending firm Blockfills has filed for bankruptcy after suspending customer withdrawals and facing mounting financial pressure, marking another setback for the digital asset sector.

Court documents indicate that Reliz Ltd., the operator behind Blockfills, along with three affiliated entities, submitted voluntary Chapter 11 restructuring petitions to the U.S. Bankruptcy Court for the District of Delaware on March 15, 2026. The filing follows months of financial strain and legal challenges for the Chicago-based firm.

Financial Losses and Liquidity Crisis

Blockfills halted customer deposits and withdrawals in February after suffering significant losses estimated at approximately $75 million. The company had been seeking emergency financing or a potential buyer in an effort to stabilize its operations before ultimately opting for bankruptcy protection.

According to the court filing, the company reported assets between $50 million and $100 million, while its liabilities were estimated to range from $100 million to $500 million, highlighting the scale of the firm’s financial difficulties.

In a statement, Blockfills said the decision to pursue Chapter 11 restructuring followed consultations with investors, clients, and other stakeholders.

The company stated that the court-supervised restructuring process would allow it to preserve business value while working toward a solution that maximizes recoveries for creditors and other affected parties.

Lawsuit Alleging Misuse of Client Funds

The bankruptcy filing comes shortly after a U.S. federal judge issued a temporary restraining order against Blockfills in a lawsuit filed by Dominion Capital.

Dominion alleges that the trading firm misappropriated customer crypto assets, improperly commingled client funds, and failed to disclose substantial financial losses. The case remains ongoing and could further complicate the company’s restructuring process.

A Major Institutional Crypto Trading Desk

Founded in Chicago, Blockfills built its reputation as a liquidity provider and lending platform for institutional clients. The company offers services including cryptocurrency lending and borrowing, derivatives trading, and over-the-counter (OTC) execution.

Its platform primarily serves institutional participants such as hedge funds, asset managers, market makers, and cryptocurrency mining companies.

Despite its current financial troubles, Blockfills had grown significantly in recent years. The firm reported more than $60 billion in trading volume during 2025, representing a 28% increase compared with the previous year. It also claimed to serve approximately 2,000 institutional clients globally.

Leadership Changes and Investor Backing

Amid the financial turmoil, Blockfills co-founder and CEO Nicholas Hammer stepped down from his leadership role. The company is currently being led by interim CEO Joseph Perry.

The firm previously attracted backing from several institutional investors, including Susquehanna Private Equity Investments, CME Ventures, Simplex Ventures, C6E, and Nexo Inc.

Continued Pressure on Crypto Lending Sector

Blockfills’ collapse underscores the ongoing challenges facing parts of the cryptocurrency lending industry, where liquidity risks and market volatility can quickly destabilize trading platforms.

While the broader digital asset market has experienced periods of recovery, the sector continues to grapple with the aftermath of previous market downturns, legal disputes, and tighter regulatory scrutiny.

The outcome of Blockfills’ Chapter 11 proceedings will determine whether the firm can restructure its operations or if its assets will ultimately be liquidated to repay creditors.