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U.S. court freezes 70 BTC in Blockfills dispute as investor sues over locked funds

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U.S. court freezes 70 BTC in Blockfills dispute as investor sues over locked funds

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.

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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.

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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.

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Crypto World

Bitcoin Traders Bet On Sub-$66K BTC In April Due To Rising Fear

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Bitcoin Traders Bet On Sub-$66K BTC In April Due To Rising Fear

Key takeaways:

  • Bearish sentiment is rising as Bitcoin options professional traders lose confidence that the $66,000 level will hold for long.

  • The exit of David Sacks as the Crypto and AI czar and a lack of a clear US Strategic Bitcoin Reserve plan added to investors’ doubts.

Bitcoin (BTC) fell to $65,530 on Friday, an 8% decline from the $71,300 level seen on Thursday. This move wiped out over $210 million in leveraged bullish Bitcoin futures and left most call (buy) options worthless during the $18.6 billion monthly expiry. Traders now anticipate a 53% chance that Bitcoin will stay below $66,000 by April 24.

April 24 Bitcoin option prices at Deribit. Source: Deribit

On Friday, the April 24 Bitcoin $66,000 put (sell) options traded at 0.0566 BTC or roughly $3,730. With a 53% implied probability of Bitcoin trading below $66,000 by late April, the mood remains decidedly bearish following the increased uncertainty in the US and Israel-Iran war, pushing traders into a risk-averse mode.

US inflation threats and stalling crypto, Bitcoin legislation

Rising oil prices and a potential $200 billion in extra US military spending led investors to demand higher returns on government bonds and dragged the S&P 500 to its lowest levels since September 2025. West Texas Intermediate (WTI) oil surged to $100 on Friday, while 5-year Treasury yields reached 4.07%, up from 3.72% three weeks prior.

US 5-year Treasury yield (left) vs. S&P 500 (right). Source: TradingView

Inflationary fear and weaker corporate earnings perspectives alone cannot explain Bitcoin’s 20% underperformance against the S&P 500 in 2026. Other factors are likely at play, including investors’ discomfort over the lack of progress on the US Bitcoin Strategic Reserve.

David Sacks has stepped down from his role as the Trump administration’s crypto and AI czar. While Sacks remains an advisor on the President’s Council on Science & Technology, his departure follows earlier comments that inflated Bitcoin investors’ expectations. Sacks had previously hinted that the US could acquire more Bitcoin through budget-neutral methods without raising taxes.

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Related: US lawmakers publish crypto tax proposal without Bitcoin tax exemption

Bitcoin 30-day options delta skew (put-call) at Deribit. Source: Laevitas

The Bitcoin options delta skew jumped to 15% on Friday, showing that put options are trading at a significant premium relative to call instruments. In balanced market conditions, this metric usually ranges between -6% and +6%. The current level indicates a lack of conviction among whales that the $66,000 level will hold. Fear has largely dominated the Bitcoin options market since mid-January.

Bitcoin options expiry favored neutral-to-bearish strategies

Friday’s monthly options expiry at $68,610 proved unfavorable for neutral-to-bullish strategies, as 97% of call options became void. Bears gained the upper hand as put options at $69,000 or higher surpassed $2 billion in open interest. Critically, part of Friday’s downward move reflects a growing unwillingness among traders to maintain Bitcoin exposure over the weekend.

Crypto markets cut risk on Friday due to uncertainty. Source: X/WhalePanda

X social platform user WhalePanda, suggested that the crash in risk markets anticipates President Trump making “another dumb escalating move” after US markets close. Consequently, the current fear seen in the options market could reverse if no major geopolitical events occur before Monday.

During bearish cycles, traders often rush for the exits at the mere sight of any event that could be deemed negative. Investors should not take Bitcoin’s implied odds at face value, as these metrics are heavily impacted by recent news and headlines. However, expectations could shift more favorably if Iran effectively releases a counter-offer to the US peace proposal.