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Custodial Insolvency

Custody failures, reserve gaps, and insolvency risk.

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BlockFills Freeze: Why a $77M Gap Escaped Client Safeguards

BlockFills’ freeze and bankruptcy exposed a basic institutional failure: clients trusted a custodian they could not independently verify was actually segregating their assets.

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Dark technical illustration of a crypto broker insolvency, showing frozen withdrawals, a gap between client balances and actual reserves, court-frozen bitcoin, and failed custody segregation controls.

Web3 Fraud Files7 min read

BlockFills Freeze: Why a $77M Gap Escaped Client Safeguards

BlockFills’ freeze and bankruptcy exposed a basic institutional failure: clients trusted a custodian they could not independently verify was actually segregating their assets.

Marcus Bishop

Mar 29, 2026