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A federal court in New York has prohibited the cryptocurrency trading company from transferring bitcoin associated with Dominion Capital, citing concerns over halted withdrawals and potential insolvency.
New York federal courthouse (Ramin Talaie/Getty Images)
Key points:
- A U.S. judge has issued a temporary restraining order that freezes 70.6 BTC purportedly belonging to Dominion Capital and prohibits crypto lender BlockFills from transferring assets internationally.
- The court has instructed BlockFills to account for and separate customer funds.
- This ruling follows BlockFills’ suspension of withdrawals and the accumulation of approximately $75 million in losses, as worries regarding insolvency intensify while the firm seeks a buyer.
A federal judge in the U.S. has issued a temporary restraining order (TRO) against crypto lender BlockFills in a lawsuit filed by Dominion Capital, which freezes assets related to the case, according to documents reviewed by CoinDesk.
In a complaint dated February 27, Dominion accused BlockFills of misappropriating and unlawfully retaining customer cryptocurrency assets worth millions, commingling client funds, and hiding substantial losses.
Dominion asserted that BlockFills obscured the misuse of client funds and failed to return the company’s assets following a suspension of withdrawals in February. The investment firm requested an asset freeze to safeguard its cryptocurrency that is stuck on BlockFills’ platform, which the court granted.
In an order filed on March 3 in the U.S. District Court for the Southern District of New York, Judge Mary Kay Vyskocil restricted the firm from moving or disposing of 70.6 bitcoin allegedly belonging to Dominion, or transferring assets outside the United States while the case is ongoing.
The court also mandated BlockFills, which is supported by trading firm Susquehanna, to account for and separate customer funds, including Dominion’s bitcoin, pending a hearing on a potential preliminary injunction.
CoinDesk previously reported that the crypto lender experienced losses of about $75 million during the recent market decline and was seeking a buyer or emergency financing.
BlockFills is a Chicago-based cryptocurrency trading and lending company that offers liquidity, financing, and risk management services to institutional clients. Its platform enables crypto lending and borrowing, derivatives trading, and over-the-counter (OTC) transactions for hedge funds, asset managers, market makers, and mining operations.
A spokesperson for BlockFills stated that the company does not comment on ongoing litigation as a matter of policy. Dominion Capital opted not to provide a comment.
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A temporary restraining order in the U.S. is an urgent court directive that prevents an individual from taking specific actions until a full court hearing can be held. It is frequently utilized in legal conflicts involving finances, assets, or financial activities to avert immediate damage.
The TRO was granted without prior notice to BlockFills, with the court indicating a risk of “immediate and irreparable injury,” emphasizing that the firm had halted client withdrawals and that insolvency could be a forthcoming reality.
BlockFills is required to respond by March 17, the date when the temporary order is scheduled to lapse unless the court extends it.
Dominion Capital is a private investment firm and family office based in New York, investing in private equity, structured finance, and digital assets, including supporting bitcoin mining companies such as Bitfarms (BITF).
Challenging circumstances
BlockFills announced it was suspending customer withdrawals and deposits on February 11 due to prevailing market and financial conditions.
At that time, the firm indicated it was collaborating with investors and clients to reach a rapid resolution and restore liquidity to the platform. CoinDesk later discovered that the crypto lender had sustained losses of roughly $75 million during the recent market downturn and was pursuing a buyer or emergency financing.
CoinDesk also reported that Nicholas Hammer, co-founder and CEO of BlockFills, has resigned from his position. The firm’s website now identifies Joseph Perry as the interim CEO.
BlockFills announced that it processed over $60 billion in trading volume in 2025, marking a 28% rise compared to the previous year, and is recognized as one of the more active desks for institutional crypto lending and borrowing. It caters to approximately 2,000 institutional clients, including hedge funds, asset managers, and mining companies.
According to insolvency expert Thomas Braziel, founder of 117 Partners, “The company is now hurtling towards bankruptcy.”
Braziel remarked, “After something like this, no serious institution is touching the platform. They are going to have to file for bankruptcy.”
The New York Law Journal was the first to report on the Dominion complaint on Monday.
Read more: Blockfills co-founder and CEO Nicholas Hammer has stepped down
