---

Chicago-based institutional crypto firm BlockFills filed a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware on March 15, 2026, disclosing assets of $50 to $100 million against liabilities of $100 to $500 million. Separately, Argentina's Public Prosecutor's Office confirmed that forensic analysts recovered a deleted draft document from the phone of businessman Mauricio Novelli, which allegedly describes a structured $5 million deal to secure Milei's public endorsement of the $LIBRA token three days before he posted about it on X.

BlockFills: A $60 Billion Firm Runs Out of Road

BlockFills processed more than $60 billion in trading volume in 2025, a 28% increase year-over-year, and served approximately 2,000 institutional clients across more than 95 countries. Despite that scale, the firm's underlying finances had deteriorated significantly. A lawsuit filed February 27 by New York investment firm Dominion Capital alleged that BlockFills misappropriated and commingled client crypto assets with company funds on a single balance sheet, concealed trading losses, and used pooled client deposits to cover operating expenses including crypto mining costs, equipment purchases, and settlements with other firms. Dominion's complaint put the balance sheet shortfall at roughly $77 million by the end of 2025.

BlockFills froze all client deposits and withdrawals on February 11, 2026. On March 5, 2026, U.S. federal Judge Mary Kay Vyskocil ordered the firm not to transfer or dispose of 70.6 BTC belonging to Dominion. The firm's co-founder and CEO, Nicholas Hammer, departed in February; Joseph Perry stepped in as interim CEO. In its bankruptcy filing, BlockFills listed 007 Capital as its largest unsecured creditor at $17.1 million, followed by the Richard E. Ward Revocable Trust at $9.4 million and Artha Investment Partners at $6.9 million.

BlockFills had received institutional backing from Susquehanna Private Equity Investments, CME Ventures, Simplex Ventures, C6E, and Nexo Inc. The involvement of CME Ventures and Nexo Inc. is notable given their market profiles and raises questions about potential contagion risk for their own institutional counterparties.

The firm had also extended loans to already-distressed crypto companies including Babel Finance and AEXA Digital. When those borrowers failed, BlockFills absorbed the losses directly. Its push into crypto mining financing added roughly $30 million more in losses as prices declined and operating costs rose. In a statement accompanying the filing, the company said Chapter 11 would "provide the necessary time and structure to stabilize the business, pursue additional sources of liquidity and recovery, and explore potential strategic transactions."

The collapse mirrors the structure of centralized lending platforms that failed during the 2022 bear market, including Celsius, BlockFi, and Genesis. BlockFills pooled institutional deposits, deployed them into lending and mining, and ran everything through a unified balance sheet. When the loan book turned illiquid and clients sought withdrawals, the mismatch became unresolvable.

The Milei-Libra Document: From Alleged Rug Pull to Potential Fraud

The $LIBRA token launched on the Solana blockchain on February 14, 2025, just 23 minutes before President Milei posted about it on X. The token was publicly marketed as dedicated to funding small businesses and entrepreneurs in Argentina. It surged from a fraction of a cent to roughly $4.50, briefly implying a market capitalization near $4.5 billion. Within hours, Hayden Davis, CEO of Kelsier Ventures and the figure who allegedly controlled around 70% of the token supply, withdrew an estimated $87 to $107 million in liquidity; his reported personal profit reached approximately $113 million, a figure distinct from the withdrawal amount. About 86% of participants ended up with losses; total investor losses reached an estimated $251 million. Milei deleted his post and said he had no knowledge of the project's mechanics.

The newly recovered document changes the evidentiary picture considerably. Forensic analysts at Argentina's Directorate of Technological Support for Criminal Investigations found the deleted file on Novelli's phone. It was created on February 11, 2025, three days before Milei's post. Written in English, it opens: "Hello friends, this is the final agreement discussed with H." Investigators believe "H" refers to Hayden Davis. The document outlines three payments totalling $5 million: $1.5 million in liquid tokens or cash upfront, another $1.5 million contingent on Milei publicly naming Davis as an adviser on X, and $2 million upon signing a formal blockchain and AI consulting contract with Milei in person, subject to review by both the president and his sister Karina Milei. Call logs from the same device show frantic communications between Novelli, the Milei siblings, and presidential adviser Santiago Caputo in the hours surrounding the token's launch and collapse.

Davis has disputed characterizations of the launch. In the only on-record statement attributed to him in the public record, he said: "This isn't some random f*cking scam."

Argentina's Anti-Corruption Office cleared Milei of ethics violations in June 2025, ruling his post was personal rather than official. Argentina's federal criminal investigation remains open. A U.S. class-action lawsuit against Davis and associated parties is also active.

What This Means Outside the United States

For institutional counterparties in Africa, BlockFills' bankruptcy is a concrete operational problem. The firm explicitly marketed itself as a global liquidity provider, with clients in more than 95 countries. Given the known scale of institutional and OTC crypto activity across the continent, counterparties in markets including those in South Africa, Nigeria, and East Africa are among those likely to be affected, though specific client locations have not been disclosed in court filings. Restructuring proceedings in Delaware will likely freeze outstanding settlements or credit lines for those clients, who have limited legal standing to participate in a U.S. bankruptcy process.

For retail investors across South Asia and Sub-Saharan Africa, the $LIBRA post-mortem carries a technical warning. Davis allegedly used a technique sometimes called "one-sided liquidity" in automated market maker pools, which are the smart contracts that enable trading on decentralized exchanges. The method involves concentrating tokens on the sell side of the pool while leaving buy-side data visible to outside observers, creating a false impression of upward momentum. This is not unique to politically connected launches and represents a structural vulnerability on any permissionless token launch.

The exposure in South Asia warrants particular attention. Pakistan, India, and Bangladesh rank among the highest-volume peer-to-peer crypto markets per capita, with retail participation concentrated on platforms including Binance, OKX, and local P2P exchanges. No mechanism currently exists for South Asian retail investors who suffered losses on $LIBRA to participate in any recovery proceeding, whether through the ongoing Argentine criminal investigation or the U.S. civil action against Davis. That gap in legal recourse is a structural feature of cross-border crypto enforcement, not an exception to it.

Both collapses point toward the same underlying problem: the cost of inadequate institutional safeguards falls hardest on counterparties and retail investors with the least access to legal recovery. The BlockFills bankruptcy hearing schedule and the Argentine criminal investigation are both ongoing, and neither has reached a final resolution.