Key Developments
A U.S. federal judge has issued a temporary restraining order (TRO) against crypto lender BlockFills in a lawsuit brought by Dominion Capital, temporarily freezing assets tied to the dispute, according to a filing seen by CoinDesk.
In a complaint dated February 27, Dominion alleged that BlockFills misappropriated and unlawfully retained millions of dollars’ worth of customer crypto assets, commingled client assets and concealed heavy losses.
Dominion claimed BlockFills concealed the misuse of customer funds and refused to return the company’s assets after suspending withdrawals in February. As part of the complaint, the investment firm sought an asset freeze to protect its crypto trapped on Blockfills’ platform, which was granted by the court.
In an order filed March 3 in the U.S. District Court for the Southern District of New York, federal Judge Mary Kay Vyskocil barred the firm from transferring or disposing of 70.6 bitcoin BTC$70,354.62 allegedly belonging to Dominion, or moving assets outside the United States while the case proceeds.
The court also ordered Blockfills, which is backed by trading giant Susquehanna, to account for and segregate customer funds, including Dominion’s bitcoin, pending a hearing on a possible preliminary injunction.
CoinDesk reported last month that the crypto lender had incurred losses of around $75 million during the recent market downturn, and was looking for a buyer or emergency funding
BlockFills is a Chicago-based crypto trading and lending firm that provides liquidity, financing and risk-management services to institutional clients. Its platform facilitates crypto lending and borrowing, derivatives trading and over-the-counter (OTC) execution for hedge funds, asset managers, market makers and mining companies.
A Blockfills spokesperson said as a matter of policy the firm does not comment on pending litigation. Dominion Capital declined to comment.
A temporary restraining order in the U.S. is an emergency court order that temporarily stops someone from taking a specific action until the court can hold a full hearing. It’s commonly used in legal disputes involving money, assets or financial activity to prevent immediate harm.
Market Context
The TRO was issued without notice to BlockFills, with the court citing a risk of “immediate and irreparable injury,” noting the firm had suspended client withdrawals and that insolvency could be imminent.
BlockFills must respond by March 17, when the temporary order is set to expire unless extended by the court.
Dominion Capital is a New York-based private investment firm and family office that invests across private equity, structured finance and digital assets, including backing bitcoin mining companies such as Bitfarms (BITF).
What To Watch
Blockfills said it was halting customer withdrawals and deposits on Feb. 11 due to recent market and financial conditions.
The firm said at the time that it was working with investors and clients to reach a swift resolution and restore liquidity to the platform. CoinDesk subsequently learned that the crypto lender had incurred losses of around $75 million in the recent market downturn and was seeking a buyer or emergency funding.
CoinDesk also reported that Nicholas Hammer, co-founder and CEO of Blockfills, has stepped down from his leadership role. The firm’s website now lists Joseph Perry as the interim CEO.
Blockfills said it processed over $60 billion in trading volume in 2025, a 28% increase from the prior year, and is among the more active institutional crypto lending and borrowing desks. It serves about 2,000 institutional clients, including hedge funds, asset managers and mining firms.
“The company is now hurtling towards bankruptcy,” according to insolvency professional Thomas Braziel, founder of 117 Partners.
“After something like this, no serious institution is touching the platform,” Braziel said. “They are going to have to file for bankruptcy.”
The New York Law Journal first reported news of the Dominion complaint on Monday.
