A U.S. federal choose has issued a short lived restraining order (TRO) towards crypto lender BlockFills in a lawsuit introduced by Dominion Capital, briefly freezing property tied to the dispute, in response to a submitting seen by CoinDesk.
In a criticism dated February 27, Dominion alleged that BlockFills misappropriated and unlawfully retained thousands and thousands of {dollars}’ value of buyer crypto property, commingled consumer property and hid heavy losses.
Dominion claimed BlockFills hid the misuse of buyer funds and refused to return the corporate’s property after suspending withdrawals in February. As a part of the criticism, the funding agency sought an asset freeze to guard its crypto trapped on Blockfills’ platform, which was granted by the court docket.
In an order filed March 3 within the U.S. District Court docket for the Southern District of New York, federal Choose Mary Kay Vyskocil barred the agency from transferring or disposing of 70.6 bitcoin allegedly belonging to Dominion, or shifting property exterior the USA whereas the case proceeds.
The court docket additionally ordered Blockfills, which is backed by buying and selling big Susquehanna, to account for and segregate buyer funds, together with Dominion’s bitcoin, pending a listening to on a attainable preliminary injunction.
CoinDesk reported final month that the crypto lender had incurred losses of round $75 million in the course of the current market downturn, and was on the lookout for a purchaser or emergency funding
BlockFills is a Chicago-based crypto buying and selling and lending agency that gives liquidity, financing and risk-management providers to institutional shoppers. Its platform facilitates crypto lending and borrowing, derivatives buying and selling and over-the-counter (OTC) execution for hedge funds, asset managers, market makers and mining firms.
A Blockfills spokesperson stated as a matter of coverage the agency doesn’t touch upon pending litigation. Dominion Capital declined to remark.
A brief restraining order within the U.S. is an emergency court docket order that briefly stops somebody from taking a particular motion till the court docket can maintain a full listening to. It’s generally utilized in authorized disputes involving cash, property or monetary exercise to forestall instant hurt.
The TRO was issued with out discover to BlockFills, with the court docket citing a danger of “instant and irreparable damage,” noting the agency had suspended consumer withdrawals and that insolvency may very well be imminent.
BlockFills should reply by March 17, when the short-term order is ready to run out until prolonged by the court docket.
Dominion Capital is a New York-based non-public funding agency and household workplace that invests throughout non-public fairness, structured finance and digital property, together with backing bitcoin mining firms equivalent to Bitfarms (BITF).
Robust instances
Blockfills stated it was halting buyer withdrawals and deposits on Feb. 11 as a consequence of current market and monetary circumstances.
The agency stated on the time that it was working with traders and shoppers to achieve a swift decision and restore liquidity to the platform. CoinDesk subsequently discovered that the crypto lender had incurred losses of round $75 million within the current market downturn and was searching for a purchaser or emergency funding.
CoinDesk additionally reported that Nicholas Hammer, co-founder and CEO of Blockfills, has stepped down from his management position. The agency’s web site now lists Joseph Perry because the interim CEO.
Blockfills stated it processed over $60 billion in buying and selling quantity in 2025, a 28% improve from the prior yr, and is among the many extra lively institutional crypto lending and borrowing desks. It serves about 2,000 institutional shoppers, together with hedge funds, asset managers and mining corporations.
“The corporate is now hurtling in the direction of chapter,” in response to insolvency skilled Thomas Braziel, founding father of 117 Companions.
“After one thing like this, no severe establishment is touching the platform,” Braziel stated. “They’re going to must file for chapter.”
The New York Legislation Journal first reported information of the Dominion criticism on Monday.
Learn extra: Blockfills co-founder and CEO Nicholas Hammer has stepped down
