A US federal judge has temporarily frozen crypto assets linked to institutional trading platform Blockfills as part of an ongoing dispute with investment firm Dominion Capital.
Summary
- A federal judge has issued a temporary restraining order blocking Blockfills from moving Bitcoin allegedly owned by Dominion Capital.
- Dominion claims the platform mixed and used customer funds to cover operational losses, creating a balance sheet deficit of $77 million.
- The move comes after the company halted withdrawals and reported heavy losses on its loans amid broader market tensions.
Court Steps In After Blockfills Halts Withdrawal, 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 approximately 70.6 Bitcoins allegedly belonging to Dominion Capital, while the case is pending.
The order was granted after Dominion filed a lawsuit accusing Blockfills of misappropriating and commingling customer funds and then refusing to return the assets after halting withdrawals earlier this year.
According to the filing, Dominion held approximately 70.55 BTC and a small cash balance on the platform. The company claims it was unable to access funds after Blockfills suddenly suspended withdrawals in early February 2026.
Dominion further alleges that Blockfills admitted during internal client meetings that client assets had been consolidated into a single balance sheet and used to cover operational costs and business losses, leaving the company with a balance sheet deficit of approximately $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 decision prevents Blockfills from transferring the disputed Bitcoin or moving associated assets out of the United States until further proceedings are initiated.
The legal action comes amid growing stress for the Chicago-based crypto brokerage. Previous reports indicated the company suffered approximately $75 million in loan losses during the recent market downturn, leading to management changes and discussions about a possible sale or rescue financing.
The temporary restraining order will remain in effect until a court hearing determines whether a longer-term injunction should be issued as the lawsuit progresses.
