Cryptocurrency lending firm Blockfills, along with its operating company Reliz Ltd. and two affiliated entities, has filed for Chapter 11 bankruptcy in a Delaware court.

 

According to the team, the filing was voluntary and in the best interests of the company and its customers. The decision, the firm said, was made after extensive discussions with investors, clients, creditors, and other stakeholders.

 

“This filing will allow the firm to implement an orderly restructuring while maintaining transparency and oversight through the court-supervised process,” Blockfills said.

 

 

 

"The bankruptcy filing was the best course of action after evaluating all available strategic and financial alternatives,” Blockfills said. The company now plans to restructure and stabilize the business while pursuing additional liquidity and recovery options.

 

In the filing, Blockfills estimated its assets at between $50 million and $100 million and its liabilities at between $100 million and $500 million, leaving a potential deficit of up to $450 million.

 

 

Blockfills Many Struggles 

The past few months have been tough for Blockfills. In February, the firm suspended customer withdrawals and deposits. According to the team, the move was intended to protect both the firm and its clients, given the impact of challenging market conditions on its liquidity.

 

Blockfills also suffered huge financial losses, reportedly losing about $75 million from its lending and other crypto services. The firm is facing a lawsuit from Dominion Capital, which alleges that it mishandled and commingled customers’ funds, prompting a U.S. federal judge to freeze approximately 70.6 bitcoins linked to the company.

 

 

Past Bankruptcy Cases

Blockfill isn’t the first crypto lending firm to file for bankruptcy. In 2022, Celsius Network, one of the largest crypto lenders, froze withdrawals in mid-year and later filed for Chapter 11 bankruptcy in July amid harsh market conditions. 

 

Court filings revealed the company had about $4.3 billion in assets and $5.5 billion in liabilities, leaving a deficit of roughly $1.2 billion. Celsius eventually shut down in February 2024.

 

Several other crypto lending companies also filed for bankruptcy in 2022, including BlockFi, Voyager Digital, Three Arrows Capital, and Hodlnaut. Some of these companies attempted to restructure and resume operations, but none succeeded, with all eventually shutting down.