BlockFills files for bankruptcy after $75M loss
6.6 Regulation BlockFills filed for Chapter 11 bankruptcy after suspending withdrawals, citing a $75M loan loss and legal issues. The firm faces up to $500M in liabilities and asset misappropriation claims.
BlockFills, a crypto trading and lending firm, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. The filing was made by operator Reliz Ltd. and three affiliated entities after the company suspended client deposits and withdrawals due to mounting financial distress, including a reported $75 million loan loss and allegations of asset misappropriation involving Dominion Capital. According to court documents, BlockFills holds assets between $50 million and $100 million, while its liabilities range from $100 million to $500 million. Unsecured claims exceed $119 million, highlighting the scale of the firm's financial challenges. The bankruptcy process aims to allow BlockFills to restructure its operations, stabilize the business, and seek new sources of liquidity while engaging with stakeholders. The case also involves a lawsuit that resulted in a federal judge freezing 70 Bitcoin and ordering the segregation of customer funds, raising concerns about the treatment of client assets in crypto bankruptcies.
