Crypto lender and liquidity provider BlockFills has filed for Chapter 11 bankruptcy protection in Delaware after suspending client deposits and withdrawals earlier this year.
The Chicago-based company said several BlockFills-related entities filed for restructuring on March 15 in the US Bankruptcy Court for the District of Delaware following mounting financial losses.
“The BlockFills team has worked diligently to pursue and evaluate all available strategic and financial alternatives and believes initiating a chapter 11 process … will provide the necessary time and structure to stabilise the business,”
The company said in a statement.
BlockFills described the voluntary filing as “the most responsible path forward” as it seeks to preserve business value and maximise recoveries for clients, creditors and other stakeholders during the court-supervised restructuring.
The bankruptcy followed a February decision to freeze client deposits and withdrawals as the company revealed about $75 million in losses tied to its lending, crypto mining and trading activities.
Financial disclosures also showed an estimated $80 million balance sheet deficit, which the firm said was worsened by past accounting lapses.
BlockFills’ restructuring efforts also include leadership and advisory changes, with co-founder and chief executive Nicholas Hammer stepping down, Joseph Perry appointed interim CEO, and restructuring advisers BRG and Katten Muchin Rosenman brought in alongside chief transformation officer Mark Renzi.