Susquehanna-backed BlockFills is preparing for restructuring and battling a customer lawsuit after acknowledging financial losses and accounting lapses, becoming one of the first firms to fall victim to the recent downturn in crypto markets.
The Chicago-based crypto options and lending platform has sought restructuring advice from consulting firm BRG and lawyers Katten Muchin Rosenman, according to people familiar with the matter.
The firm last month was forced to freeze client withdrawals following loan losses and bad bets on crypto mining. BlockFills has since told potential new investors that it previously suffered from inaccuracies in its financial reporting.
Trouble at the firm evokes echoes of the litany of issues that befell crypto lenders and trading companies during the digital asset crash in 2022, which culminated in the collapse of FTX.
On Thursday, a Manhattan federal judge imposed a temporary restraining order on BlockFills following a lawsuit from one of its clients, Dominion Capital, which claims the company improperly handled customer funds.
BlockFills said it had been “actively pursuing multiple avenues to put the company in the strongest position”.
“We remain in close contact with our clients as we pursue these avenues and are hopeful we will, in the near future, be in a position to articulate our plan,” it said in a statement, adding that it has “made a number of changes to the company’s processes and procedures”. It declined to comment on pending litigation.
Bitcoin has plunged about 40 per cent from the record highs it reached in 2025 as President Trump vowed to make the US the “crypto capital” of the world.
Since then, the market has suffered huge losses as investors flee risky assets in the midst of increasing geopolitical uncertainty.
BlockFills’ difficulties have mounted three years after a cascade of failures at crypto lenders and trading firms during the market crash in 2022.
Over the course of that year, several lenders and exchanges failed — including Celsius Network, Voyager Digital, BlockFi and FTX — beginning a long period of low crypto prices known as the “crypto winter”.
“The same story happens over and over again,” said Sunny Lu, co-founder of VeChain, a blockchain solutions firm.
BlockFills, which was founded in 2018, transacted about $60bn in volume in 2025, with $20bn in spot trading and roughly $40bn in derivatives, and positioned itself to serve hundreds of institutional clients.
Since freezing withdrawals, BlockFills has appointed Mark Renzi from BRG as “chief transformation officer”. Board director Joe Perry has served as interim chief executive since the previous CEO stepped down last year.
Its management is now hoping to complete a restructuring that would inject new capital and impose new governance and financial controls.
Those controls include processes that the company has only recently implemented to approve expenses and forecast liquidity.
BlockFills has told would-be investors that its financial issues stem from losses in crypto trading, mining and lending — as well as poor bookkeeping in the past — leading to a nearly $80mn deficit on its balance sheet.
The company also said its management had been making decisions based on inaccurate financial information. In 2024, it paid $12mn in employee bonuses while logging roughly $900,000 in adjusted profits.
BlockFills has told investors it amassed losses of about $23mn on lending with claims to Babel Finance and Aexa Digital Finance, both of which filed for bankruptcy.
It is also owed money from the bankruptcies of FTX while it owes funds to that of Celsius, according to investors contacted by the company.
Nexo, a crypto lender and shareholder in the firm, lent money to BlockFills as part of a deal to finance crypto mining. BlockFills ultimately defaulted on the loan from Nexo.
Nexo said it participated in BlockFills’ fundraising in 2022 in a statement. It does not “have exposure to BlockFills, and other any prior matters between the companies have been resolved”.
BlockFills suffered nearly $30mn in losses on its foray into crypto mining before shutting down that business.
Customers remain locked out of funds held by the company. Its backers, which include trading firm Susquehanna and CME Ventures, face potential losses on the $37mn of equity investment BlockFills raised in 2022.
In the customer lawsuit, filed last week, Dominion Capital has secured a restraining order after alleging BlockFills co-mingled customer assets.
Dominion claimed that executives from BlockFills as well as its adviser BRG “admitted” that the company had “commingled customer assets and having a balance sheet shortfall”.
In meetings that the company held with customers after freezing their assets, BlockFills allegedly acknowledged that “its customers’ digital assets were ‘not segregated per client’ and were ‘not segregated on separate wallets per customer’ but were commingled into ‘one balance sheet’.”
Lawyers for Dominion also said the company executives admitted to using those funds to cover expenses and losses related to its crypto-mining business as well as making unsecured loans.
Dominion was granted a temporary restraining order barring BlockFills from conveying or transferring any assets under its control “with intent to hinder, delay or defraud creditors or frustrate the enforcement of any judgment” that may come in Dominion’s favour.
Additional reporting from Kaye Wiggins
