BlockFills, the crypto lending and trading firm operating as Reliz Ltd., is facing mounting restructuring pressure after a U.S. federal court issued a temporary restraining order freezing customer assets and the company suspended client withdrawals.
A filing in the Southern District of New York, case 1:26-cv-01672-MKV, shows that Dominion Capital LLC sued BlockFills after the firm froze withdrawals. The March 3, 2026 temporary restraining order bars BlockFills from dissipating or transferring disputed customer assets, including 70.5556739914 Bitcoin held on behalf of Dominion.
The court wrote that BlockFills had suspended client withdrawals and that the risk of insolvency was “likely and imminent.” BlockFills was ordered to respond by March 17, 2026.
It is important to note that this is a district court civil action, not a bankruptcy docket. The restraining order addresses alleged customer asset misuse, not a formal insolvency proceeding.
Restructuring talk builds around BlockFills
The Financial Times reported that BlockFills was preparing for restructuring after freezing withdrawals and facing litigation. The outlet cited a balance-sheet deficit of nearly $80 million.
That reporting aligns with the federal court record but goes further in describing active restructuring preparations. Neither the FT report nor the court filing confirms that BlockFills has entered Chapter 11 bankruptcy protection.
The distinction matters. Restructuring preparation can involve informal creditor negotiations, asset sales, or operational wind-downs that never reach a bankruptcy court. The situation echoes the pattern seen across crypto lenders in recent cycles, where withdrawal freezes preceded formal proceedings by weeks or months.
The broader crypto lending sector continues to face scrutiny as firms navigate liquidity pressures. Separately, questions around transparency in crypto ventures have surfaced in other contexts, including how new token-backed projects handle investor access.
What remains unconfirmed
Widely circulated claims that BlockFills has filed for Chapter 11 with up to $500 million in liabilities remain unverified. No bankruptcy petition, docket entry, or court case number for a Chapter 11 filing has surfaced in publicly accessible records.
No primary filing supports the specific $500 million liabilities figure. No official BlockFills statement announcing a bankruptcy filing has been located.
Readers and creditors should watch for three developments: a bankruptcy court docket appearing under BlockFills or Reliz Ltd., an official company statement, and the outcome of the March 17 response deadline in the Dominion Capital case.
The confirmed record, a federal asset freeze, suspended withdrawals, and reporting on an $80 million balance-sheet deficit, points to serious financial distress. Whether that distress leads to a formal Chapter 11 case or an alternative resolution remains an open question with a near-term answer likely tied to this week’s court deadline.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
