A U.S. federal judge has temporarily frozen crypto assets linked to institutional trading platform Blockfills as part of an ongoing legal dispute with investment firm Dominion Capital.
Summary
- A federal judge issued a temporary restraining order preventing Blockfills from moving Bitcoin allegedly belonging to Dominion Capital.
- Dominion claims the platform commingled and used customer funds to cover operational losses, creating a $77M balance-sheet shortfall.
- The ruling comes after the firm halted withdrawals and reported heavy lending losses amid broader market stress.
Court steps in after Blockfills withdrawal halt, freezes 70 BTC
In a temporary restraining order issued by the U.S. District Court for the Southern District of New York, the court barred Blockfills from transferring or disposing of roughly 70.6 Bitcoin allegedly belonging to Dominion Capital, while the case proceeds.
The order was granted after Dominion filed a complaint accusing Blockfills of misappropriating and commingling customer funds, then refusing to return assets after halting withdrawals earlier this year.
According to the filing, Dominion had held about 70.55 BTC and a small cash balance on the platform. The firm claims it was unable to access the funds after Blockfills suddenly suspended withdrawals in early February 2026.
Dominion further alleges that Blockfills admitted during internal client meetings that customer assets had been commingled on a single balance sheet and used to cover operational costs and trading losses, leaving the company with a balance sheet shortfall of about $77 million by the end of 2025.
Judge Mary Kay Vyskocil granted the emergency order after Dominion argued there was a risk the assets could be moved or depleted before the court could fully review the case. The ruling prevents Blockfills from transferring the disputed Bitcoin or moving related assets outside the United States until further proceedings are held.
The legal action comes amid mounting stress for the Chicago-based crypto brokerage. Earlier reports indicated the firm suffered roughly $75 million in lending losses during the recent market downturn, prompting leadership changes and discussions about a potential sale or rescue financing.
The temporary restraining order will remain in place until a court hearing determines whether a longer-term injunction should be issued as the lawsuit moves forward.