Chicago‑based crypto lender and trading firm BlockFills has entered Chapter 11 bankruptcy after weeks of mounting pressure. On March 16, its parent entity Reliz Ltd. and several affiliates filed in the U.S. Bankruptcy Court for the District of Delaware.
For users, this means BlockFills will now try to reorganize under court supervision instead of shutting down overnight. But customers who already saw deposits and withdrawals halted in February still do not know how much they will get back.
From Frozen Withdrawals to a Bankruptcy Filing
BlockFills first paused customer deposits and withdrawals in February, citing “liquidity conditions” and talks with investors and creditors. The move raised red flags because the firm marketed itself as a liquidity provider for more than 2,000 institutional clients in over 95 countries.
Shortly after, major creditor Dominion Capital sued BlockFills in New York, accusing the company of misusing client assets. A federal judge ordered 70.6 Bitcoin tied to the dispute frozen and told the firm to separate customer funds from company money.
In its Chapter 11 paperwork, BlockFills reported estimated assets between $50 million and $100 million. Its estimated liabilities are much larger, between $100 million and $500 million, leaving a big hole on the balance sheet.
Dominion says BlockFills admitted in February talks that customer and corporate assets were combined in one balance sheet. That mix allegedly created a shortfall of about $77 million by the end of 2025, partly tied to mining and other risky bets.
How BlockFills Is Framing the Restructuring
In a statement, BlockFills called Chapter 11 “the most responsible path” after discussions with investors, clients, and creditors. The company says it plans to stabilize operations, look for new liquidity, and explore strategic deals while the court oversees the process.
BlockFills hired restructuring advisors from BRG and lawyers from Katten Muchin Rosenman to guide the process. The firm stresses that protecting client interests is its “top priority,” but it has not given a recovery range or timeline yet
BlockFills’ collapse adds to a long list of failed crypto lenders that grew fast during bull markets, then cracked under stress. The case could shape how courts deal with commingled crypto assets and unsecured creditors in future bankruptcies.
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