BlockFills CEO Nicholas Hammer Exits Following $75 Million Loss, Withdrawals Remain Frozen

BlockFills, a Chicago-based institutional crypto liquidity provider and lender, suspended client deposits and withdrawals on February 11, 2026, following approximately $75 million in losses tied to its lending operations, and co-founder and CEO Nicholas Hammer has stepped down from his leadership role.

The firm has appointed Joseph Perry as interim CEO and is actively seeking a buyer or strategic investor as customer funds remain inaccessible amid broader market weakness.

Leadership Transition and Losses

Nicholas Hammer, who co-founded BlockFills and served as its chief executive officer, has departed the company in February 2026. Joseph Perry has been appointed as interim CEO, according to the firm’s website and official communications.

The leadership change follows significant financial losses of approximately $75 million stemming from the firm’s crypto lending operations. The losses occurred when the value of crypto collateral backing loans fell during market declines, reducing coverage ratios and triggering a cascade of liquidity pressure.

A company spokesperson confirmed that Hammer was CEO until July 2025, though his LinkedIn profile as of late February 2026 continued to list him as CEO of BlockFills. He did not respond to requests for comment following the announcement.

Withdrawal Freeze and Client Communications

BlockFills suspended client deposits and withdrawals on February 11, 2026, citing recent market and financial conditions. Customer deposits and withdrawals remain halted as of late February 2026, with no timeline provided for resumption of normal operations.

Prior to the freeze, some clients received warnings and were urged to withdraw their crypto assets from the platform, according to sources familiar with the matter. The selective advance notice has raised questions about information asymmetry and preferential treatment among the firm’s institutional client base.

In a February 11 press release, the company stated it was working with investors and clients to reach a swift resolution and restore liquidity to the platform. The firm noted that clients have been able to continue trading with BlockFills for the purpose of opening and closing positions in spot and derivatives trading and select other circumstances, even while deposits and withdrawals remain suspended.

Institutional Client Base and Market Position

BlockFills serves approximately 2,000 institutional clients, including hedge funds, asset managers, mining firms, and high-net-worth trading firms. The company reported handling more than $60 billion in trading volume during 2025, a 28% increase from the prior year, positioning it among the most active institutional crypto lending and borrowing desks.

The firm operates from Chicago and provides liquidity, lending, and trading infrastructure to institutional crypto clients globally. Its services enable hedge funds, traders, and asset managers to access crypto markets with the operational scale required for institutional participation.

BlockFills is backed by investors including Susquehanna Private Equity Investments, CME Ventures, Simplex Ventures, C6E, and Nexo. The company raised $37 million in a January 2022 Series A funding round, reflecting institutional investor confidence in its business model prior to the current distress.

Distress Sale and Strategic Options

Following the losses and withdrawal freeze, BlockFills is actively seeking a buyer or strategic investor to recapitalize the business. The pursuit of external capital or acquisition reflects the severity of the balance sheet damage and the firm’s need for fresh capital to restore client access and rebuild trust.

The situation echoes similar institutional crypto lender failures during the 2022 crypto winter, when firms including Celsius, BlockFi, and Genesis froze customer accounts and ultimately filed for bankruptcy as markets unraveled. Those collapses resulted in prolonged creditor recoveries and highlighted the systemic risks posed by crypto lending leverage during price downturns.

Market Context and Industry Implications

The BlockFills distress occurs amid a broader market downturn that has seen major tokens trade well below recent highs. Bitcoin has remained below $70,000 following a sharp pullback from its late-2025 all-time high above $120,000, while Ether trades around $2,000 amid persistent weakness across digital asset markets.

For institutional crypto markets, lender losses and withdrawal freezes restrict liquidity available to hedge funds, traders, and asset managers, potentially amplifying market stress during volatile periods. Counterparty risk concerns may cause institutions to reduce exposure to crypto lending desks, further constricting credit availability.

The episode also raises questions about risk management practices at institutional crypto lenders, particularly regarding collateral coverage, concentration limits, and stress testing during price declines. When crypto collateral values fall rapidly, even overcollateralized positions can become underwater if liquidation mechanisms fail or market depth proves insufficient.

FAQ: Understanding the BlockFills Situation

Q: Why did BlockFills suspend client withdrawals?

A: BlockFills suspended deposits and withdrawals on February 11, 2026, after suffering approximately $75 million in losses from its crypto lending operations. The losses occurred when the value of crypto collateral backing loans declined during market downturns, impairing the firm’s ability to meet client redemption requests and maintain normal operations.

Q: Can BlockFills clients access their funds?

A: Client deposits and withdrawals remain frozen as of late February 2026. The company has stated it is working with investors and clients to restore liquidity, but has provided no timeline for when customers might regain access to their assets. Some clients continue to trade on the platform for spot and derivatives positions, but funds cannot be withdrawn.

Q: What happens to BlockFills now?

A: BlockFills is actively seeking a buyer or strategic investor to recapitalize the business following its losses. The outcome will depend on whether a purchaser can be found willing to inject capital and assume the firm’s liabilities. If no buyer emerges, the company may face restructuring or insolvency proceedings similar to other crypto lenders that failed during market downturns.

Q: How does this compare to previous crypto lender failures?

A: The situation mirrors the 2022 collapses of Celsius, BlockFi, and Genesis, which also froze customer withdrawals following losses from lending activities during market declines. Those firms ultimately filed for bankruptcy, with clients facing extended recovery periods and partial losses. The BlockFills episode suggests institutional crypto lending remains vulnerable to liquidity stress during volatile price cycles.

Q: Who are BlockFills’ investors?

A: BlockFills is backed by Susquehanna Private Equity Investments, CME Ventures, Simplex Ventures, C6E, and Nexo. The firm raised $37 million in a January 2022 Series A round, reflecting institutional backing that may now be tested as the company seeks additional capital or a buyer.