BlockFills, the Chicago-based crypto options and lending platform backed by Susquehanna, is preparing for a corporate restructuring after suffering substantial financial losses and facing legal action from a customer alleging mishandling of funds.
According to a Financial Times report, the firm has engaged consulting group BRG and law firm Katten Muchin Rosenman to advise on restructuring efforts.
BlockFills froze client withdrawals last month following loan losses and unsuccessful bets tied to crypto mining operations. The company has since disclosed to potential investors that its financial reporting contained inaccuracies.
A Manhattan federal judge issued a temporary restraining order against BlockFills on Thursday after a lawsuit from Dominion Capital, which alleges the firm improperly handled customer funds.
Dominion claims the company co-mingled customer assets and failed to segregate funds by client. According to court filings, BlockFills executives acknowledged that customer assets were held together on a single balance sheet rather than in separate wallets.
The lawsuit also alleges company executives used those funds to cover operating expenses, crypto mining losses and unsecured loans.
BlockFills said it is actively exploring options to stabilize the company.
The firm has appointed BRG executive Mark Renzi as chief transformation officer as it works on a restructuring plan that could bring in new capital and strengthen financial controls.
BlockFills told potential investors that its financial issues stem from losses in trading, lending and crypto mining, along with poor bookkeeping. The company reported a balance sheet deficit of roughly $80 million.
BlockFills also reported losses of roughly $23 million tied to lending exposure to Babel Finance and Aexa Digital Finance, both of which later filed for bankruptcy. The company is also owed funds from the bankruptcy of FTX while owing funds to the bankruptcy estate of Celsius.
The firm suffered nearly $30 million in losses from its crypto mining venture before shutting down that business.
Founded in 2018, BlockFills processed about $60 billion in trading volume in 2025, including $20 billion in spot trading and roughly $40 billion in derivatives.
Source: https://cryptobriefing.com/blockfills-restructuring-crypto-challenges/
