The BlockFills Chapter 11 (Bankr. D. Del., before Judge Horan) is now eight weeks past petition with the debtors having conceded at first-day hearings that customer funds were always commingled — a structural concession that pushes customers squarely into the unsecured class under the Celsius Earn framework. The UCC (SBI VC Trade, Dominion Capital + 5 others) selected FTI as financial advisor; retention hearing May 28. Ad hoc creditor group represented by Cleary Gottlieb (O'Neal, VanLare) + Young Conaway. Under the Third Circuit's In re FTX ruling, a § 1104(c) examiner motion is essentially mandatory above the $5M threshold — high probability within sixty days. Genesis LOC v. DCG ($3.2B aggregate) and the Prince Group Ch. 15 matter remain the dominant parallel tracks.
The dominant active matter in the U.S. crypto-insolvency docket remains In re Reliz Technology Group Holdings, Inc. (Bankr. D. Del.), better known as the BlockFills Chapter 11, which has now passed eight weeks since the March 15, 2026 petition before Judge Horan. The debtors' first-day concession that customer funds “have always been commingled with company funds and other customer funds, and that all such funds are estate property” frames the central legal question for the case: under the Celsius Earn-Accounts framework adopted by Judge Glenn (Bankr. S.D.N.Y. Jan. 4, 2023), customer property under § 541 turns on the contract-law reading of the Terms of Use, and a commingling concession at first-day hearings dramatically narrows the pathways by which customers can establish a constructive-trust or bailment-based superpriority claim. Pre-petition discovery posture is also relevant: the February 27, 2026 ex parte TRO entered by Judge Vyskocil (S.D.N.Y.) in the Dominion Capital action, freezing 70.56 BTC and ordering an accounting and segregation of customer funds, created a documentary record that will inform the U.S. Trustee's posture on a Section 1104(c) examiner motion. (CoinDesk) (Bondoro)
The Official Committee of Unsecured Creditors, appointed March 27, 2026, includes SBI VC Trade as its anchor institutional creditor alongside Dominion Capital and five others — a composition that telegrams an asset-segregation and customer-property litigation strategy rather than a pure recovery-maximization posture. FTI Consulting was selected as the UCC's financial advisor on April 1, 2026, with the retention hearing set for May 28, 2026, and the cure/contract-rejection and bidding-procedures calendar set at the April 16 final hearing on cash collateral begins to compress against an ad hoc creditor group represented by Cleary Gottlieb (Sean O'Neal, Jane VanLare) and Young Conaway (Sean Greecher). (Petition11) The Third Circuit's In re FTX ruling, which converts § 1104(c)'s $5 million threshold into a mandatory examiner appointment, materially raises the probability that BlockFills will see an examiner motion in the next sixty days regardless of debtor objections. (Mintz)
Legacy crypto-debtor wind-downs continue to mature. The Genesis Litigation Oversight Committee's two-front campaign against Digital Currency Group — the May 13, 2025 Delaware Chancery complaint seeking $2.2 billion and the May 19, 2025 S.D.N.Y. adversary complaint seeking over $1 billion in fraudulent-transfer recoveries — has crossed into discovery and motion practice, with DCG's $1.1 billion promissory-note counterclaim against Genesis subsidiaries setting up a substantive offset battle that will shape what residual proceeds reach customer creditors. (BusinessWire) (AInvest) On the FTX side, Examiner Robert Cleary's January 2025 supplemental report recommending a probe of the LedgerX sale has not yet generated a derivative adversary, but the third creditor distribution that commenced September 30, 2025 (approximately $1.6 billion) has materially improved liquidity for trade-claim purchasers.
Cross-border friction continues to define the harder cases. The Prince Group Cambodia/BVI matter, in which BVI liquidators of approximately thirty BVI subsidiaries connected to alleged crypto fraud are racing to obtain Chapter 15 recognition in the S.D.N.Y., is the leading test case for how aggressively U.S. bankruptcy courts will accommodate offshore wind-up vehicles whose underlying mandate is closer to fraud investigation than insolvency proceeding. (Global Restructuring Review) The Global Cord Blood line of authority continues to narrow what counts as a recognizable “foreign main proceeding,” and Hong Kong's continued adherence to the Gibbs Rule creates a structural problem for crypto exchanges with HK-law Terms of Use that nonetheless seek to restructure abroad. (Jones Day)
Distressed-debt buyers evaluating BlockFills GUC claims should price against the Celsius/FTX/Genesis framework — meaning a customer-property characterization that pushes deposits into the unsecured pool, a § 363 disposition path for the operating business, and a Genesis-style “dollarization cap” treatment as the most plausible distribution mechanic given the commingling concession. Customer-property objectors should be marshalling Terms-of-Use language now in preparation for a contested customer-property hearing, and should be coordinating with SBI VC Trade and Dominion Capital through the UCC rather than filing parallel adversary proceedings that could be consolidated against them. Cross-border claimants in offshore-domiciled crypto debtors should be preparing parallel Chapter 15 papers early — the Global Cord Blood and Prince Group dockets suggest that bankruptcy courts will scrutinize the substantive insolvency-versus-fraud nature of the foreign proceeding. Plan-confirmation litigators on FTX and Celsius post-effective dockets should treat the clawback adversary calendar as the dominant near-term recovery driver and should be calendaring against the rolling preference and fraudulent-transfer trial schedules.
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