Crypto trading and lending firm BlockFills has filed for Chapter 11 bankruptcy after weeks of turmoil, as it cannot currently meet its financial obligations. The crypto trading platform has also asked the court for protection while it restructures its business.
BlockFills begins court-supervised restructuring
Reliz Ltd., an entity that operates primarily under the trade name BlockFills, filed a petition on Sunday to restructure the organization as per Chapter 11. The case was submitted to the U.S. Bankruptcy Court for the District of Delaware, a court where many corporate bankruptcies are handled.
The filing stated that the company reported an estimated asset of $50 million to $100 million and estimated liabilities between $100 million and $500 million, pushing the company to seek bankruptcy protection.
“This filing will allow the firm to implement an orderly restructuring while maintaining transparency and oversight through the court-supervised process,” the company said.
Liquidity crisis and legal pressure for BlockFills
Liquidity challenges also hit BlockFills, adding to the company’s challenges. In February, the company had temporarily suspended client deposits and withdrawals due to market volatility and financial conditions.
The situation worsened when Dominion Capital sued BlockFills. In early March, the company received a temporary restraining order issued by a U.S. federal judge and froze some assets connected to the dispute while the case proceeded.
BlockFills is a crypto trading and lending firm that mainly serves institutional clients, providing lending and borrowing services, derivatives trading, and over-the-counter (OTC) executing trades privately outside public exchanges.
Dominion alleged that BlockFills misused customer assets and the company refused to return millions of dollars in crypto that Dominion had stored on the platform, according to a previous court filing.
