A U.S. federal judge has issued a temporary restraining order (TRO) against crypto lender BlockFills in a lawsuit brought by Dominion Capital, freezing assets tied to the dispute, according to a filing seen by CoinDesk. The order bars BlockFills from transferring or disposing of 70.6 bitcoin allegedly belonging to Dominion while the case proceeds.
Dominion's Allegations: Misappropriation and Commingling
In a complaint dated February 27, Dominion alleged that BlockFills misappropriated and unlawfully retained millions of dollars’ worth of customer crypto assets, commingled client funds and concealed heavy losses. Dominion claimed BlockFills refused to return its assets after suspending withdrawals in February, prompting the request for an asset freeze. Federal Judge Mary Kay Vyskocil in the Southern District of New York granted the TRO on March 3, also ordering BlockFills to segregate customer funds pending a hearing on a possible preliminary injunction.
BlockFills' Financial Woes: $75M Loss, CEO Steps Down
BlockFills had incurred losses of around $75 million during the recent market downturn and was seeking a buyer or emergency funding, as reported last month. On Feb. 11, the firm halted customer withdrawals and deposits, citing market and financial conditions. Co-founder and CEO Nicholas Hammer stepped down, with Joseph Perry named interim CEO. “The company is now hurtling towards bankruptcy,” said Thomas Braziel, founder of 117 Partners, an insolvency professional. “After something like this, no serious institution is touching the platform. They are going to have to file for bankruptcy.”
BlockFills is a Chicago-based crypto trading and lending firm backed by Susquehanna, serving about 2,000 institutional clients. It processed over $60 billion in trading volume in 2025. The TRO was issued without notice to BlockFills, citing risk of “immediate and irreparable injury.” BlockFills must respond by March 17, when the order expires unless extended. Dominion Capital declined to comment.