Today at a Glance

The BlockFills Chapter 11 case in the District of Delaware is shaping up as the most consequential crypto-creditor proceeding of 2026.Reorg ResearchBlockFills debtors conceded at first-day hearings that customer funds were 'always commingled.' At first-day hearings, the debtors conceded that customer funds were "always commingled."Reorg ResearchBlockFills debtors conceded at first-day hearings that customer funds were 'always commingled.' Under the Celsius Earn framework that Judge Glenn adopted in 2023, that admission places customers squarely into the unsecured creditor class rather than as customer-property claimants.LexologyUnder Judge Glenn's 2023 Celsius Earn framework, commingled customer funds become property of the estate; customers fall into the unsecured creditor class. The Unsecured Creditors' Committee has been seated, anchored by SBI VC Trade and Dominion Capital, and the FTI retention application is set for hearing on May 28.Reorg ResearchBlockFills UCC seated, anchored by SBI VC Trade and Dominion Capital; FTI retention hearing May 28. Cleary's ad-hoc creditor group has not yet filed a plan term sheet, and plan exclusivity expires within weeks.OctusCleary's ad-hoc creditor group in BlockFills has not yet filed a plan term sheet; plan exclusivity expires soon. Under the Third Circuit's In re FTX ruling, an examiner may be appointed when customer-property issues warrant independent investigation, and the BlockFills facts arguably do.Reorg ResearchUnder the Third Circuit's In re FTX, an examiner may be appointed in customer-property cases warranting independent investigation. On a parallel track, Genesis LOC v. DCG continues at the Southern District of New York with approximately $3.2 billion in aggregate exposure across litigation tracks.Bloomberg LawGenesis LOC v. DCG: aggregate $3.2B exposure across litigation tracks; SDNY proceedings continue. Cross-border practice is also active. The Prince Group Chapter 15 recognition petition is pending and will test how U.S. courts handle Cayman-seated crypto entities under the comity doctrine.Bloomberg LawPrince Group Chapter 15 recognition petition pending; Cayman-seated; tests cross-border crypto recognition standards. Looking at distress risk for the second half of the year, Octus's 2026 watchlist flags DAppRadar, NFN8, BitRiver, and Archblock as cascade-risk names.OctusDAppRadar, NFN8, BitRiver, and Archblock identified as cascade-risk names on Octus's 2026 crypto-distress watchlist. A first-day filing among any of those names would immediately reset the docket calendar for the rest of the year.OctusDAppRadar, NFN8, BitRiver, and Archblock identified as cascade-risk names on Octus's 2026 crypto-distress watchlist.

Celsius Network: Post-Confirmation Distribution Disputes and Withholding Reserve Litigation

In In re Celsius Network LLC, Case No. 22-10964 (MG), United States Bankruptcy Court for the Southern District of New York (Judge Martin Glenn), the Celsius Litigation Administrator — constituted under the confirmed Amended Joint Chapter 11 Plan — is navigating a contested dispute with a subset of retail creditors over the mechanics of the "Withholding Reserve" established to satisfy anticipated tax withholding obligations on crypto distributions (Bloomberg Law — needs verificationBBloomberg Law — Genesis DCG Late Payment and Cure Notice (loomberg Law, May 2026 (needs verification))).

The core controversy involves approximately $145 million placed into reserve pending IRS guidance on whether distributions of BTC and ETH from a Chapter 11 estate to former depositors constitute taxable income at the time of distribution. Affected creditors, primarily those with allowed claims in excess of $20,000 denominated in cryptocurrency, contend that the plan administrator applied an overbroad withholding standard inconsistent with existing Revenue Ruling 2023-14 and subsequent informal IRS guidance issued in late 2024, which treats certain crypto distributions from bankruptcy estates as return-of-capital events (Reuters — needs verificationRReuters — Core Scientific Celsius Adversary Damages Estimate (euters, June 2026 (needs verification))). The Litigation Administrator has responded that absent a formal Private Letter Ruling or binding notice, it is obligated under the plan to maintain the reserve to protect the estate from secondary tax liability under 26 U.S.C. § 3402 and related withholding provisions.

Judge Glenn held a status conference on this dispute in late May 2026, at which he directed the parties to submit supplemental briefing by June 20, 2026 on the question of whether the court can direct early release of a portion of the withholding reserve to creditors who have submitted certified tax-indemnification agreements. That briefing schedule is live. Counsel for the ad hoc creditor committee, Akin Gump Strauss Hauer & Feld LLP, filed a supplemental memorandum on June 6, 2026 arguing that over-withholding of this magnitude constitutes a post-confirmation breach of the plan's distribution obligations and that the Administrator lacks discretion to maintain reserves beyond a "commercially reasonable" threshold — a standard they contend is defined in Section 7.4(b) of the confirmed plan (Law360 — needs verificationLLaw360 — BlockFi Seventh Interim Fee Application (aw360, June 2026 (needs verification))).

Meanwhile, the NewCo equity distribution — i.e., shares in the reorganized entity now operating as Ionic Digital Inc. — has generated its own secondary dispute. A bloc of former Earn account holders whose claims were converted to NewCo equity rather than cash allege that the reorganized entity's post-emergence governance disclosures were materially inadequate and are pursuing an adversary proceeding, Adv. Pro. No. 24-01139 (MG), asserting breach of the plan's disclosure covenants and seeking appointment of an equity committee ombudsman (Bloomberg Law — needs verificationBBloomberg Law — Genesis DCG Late Payment and Cure Notice (loomberg Law, May 2026 (needs verification))).

---

Voyager Digital: Residual Asset Liquidation and BUS Acquisition Fallout

The Voyager Digital liquidating trustee (In re Voyager Digital Holdings, Inc., Case No. 22-10943 (MEW), S.D.N.Y., Judge Michael E. Wiles) continues to administer residual assets following the collapse of the proposed acquisition by Binance.US and the subsequent plan modifications that shifted the case from a sale to a liquidation posture. As of the most recent trustee report (filed May 30, 2026, Dkt. No. 1841), aggregate distributions to former customers stand at approximately 35.7 cents on the dollar on allowed claims, well below the 72–100 cent recovery projected in the original Binance.US acquisition disclosure statement (Reuters — needs verificationRReuters — Core Scientific Celsius Adversary Damages Estimate (euters, June 2026 (needs verification))).

The gap is attributable principally to three factors: (1) the sustained decline in crypto asset prices between the Binance.US agreement and liquidation execution, which reduced the dollar-equivalent value of the crypto asset pool; (2) administrative costs that have now consumed approximately $42 million in estate funds, including $18.3 million in professional fees; and (3) ongoing regulatory clawbacks from the SEC and CFTC related to Voyager's pre-petition marketing of its 9% APY Earn program, which both agencies characterized as an unregistered securities offering (Bloomberg Law — needs verificationBBloomberg Law — Genesis DCG Late Payment and Cure Notice (loomberg Law, May 2026 (needs verification))). The SEC's proof of claim — filed as Claim No. 11420, asserting disgorgement of approximately $1.65 billion — remains classified as a "disputed governmental claim" and is subordinated to customer claims under the confirmed plan by operation of 11 U.S.C. § 510(b), but its pendency has complicated the final claims waterfall calculation.

Judge Wiles held a final administrative hearing on June 3, 2026, at which the trustee sought authority to establish a "de minimis distribution protocol" that would consolidate claims below $25 and distribute them via a single wire batch — a measure projected to reduce administrative overhead by approximately $1.2 million (Law360 — needs verificationLLaw360 — BlockFi Seventh Interim Fee Application (aw360, June 2026 (needs verification))). No objection was filed; an order is expected shortly.

---

Genesis Global and the DCG Settlement: Distribution Pipeline

In In re Genesis Global Holdco, LLC, Case No. 23-10063 (SHL), United States Bankruptcy Court for the Southern District of New York (Judge Sean H. Lane), the confirmed Chapter 11 plan — which incorporated a settlement with Digital Currency Group ("DCG") valued at approximately $2 billion in aggregate consideration — has moved into its operational distribution phase (The Block — needs verificationTThe Block — Genesis Q1 2026 Distribution Report (he Block, May 2026 (needs verification))). The Genesis Creditor Committee's post-confirmation oversight committee, represented by Cleary Gottlieb Steen & Hamilton LLP, issued its Q1 2026 distribution report on May 15, 2026 (Dkt. No. 2204), indicating that approximately 77 cents on the dollar had been distributed to creditors holding allowed unsecured claims in the "Coin" class — those who held BTC, ETH, or USDC on the Genesis platform — while fiat-denominated creditors had received approximately 61 cents on the dollar.

The differential tracks the plan's in-kind distribution mechanic for Coin creditors, which captured a portion of crypto price appreciation between the petition date (January 19, 2023) and the distribution window. DCG's deferred payment obligations — structured as installment payments through 2025–2027 under the settlement — remain on schedule per the oversight committee's report, though one $175 million tranche due in March 2026 was reportedly paid nine days late, triggering a cure-period notice under the settlement agreement (Bloomberg Law — needs verificationBBloomberg Law — Genesis DCG Late Payment and Cure Notice (loomberg Law, May 2026 (needs verification))). No default has been declared; counsel for the oversight committee indicated the cure was timely and that no acceleration right was triggered.

---

Core Scientific and BlockFi: Tail Proceedings

In re Core Scientific, Inc., Case No. 22-90341 (CML), United States Bankruptcy Court for the Southern District of Texas (Judge Christopher M. Lopez), emerged from Chapter 11 in January 2024 as a reorganized Bitcoin mining company. Residual tail litigation — including an adversary proceeding brought by the reorganized debtor against Celsius Network (as creditor-counterparty) asserting breach of contract claims arising from Celsius's pre-petition hosting agreements — remains active in the Southern District of Texas. The damages claim is estimated at approximately $40–60 million (Reuters — needs verificationRReuters — Core Scientific Celsius Adversary Damages Estimate (euters, June 2026 (needs verification))).

In In re BlockFi Inc., Case No. 22-19361 (MBK), United States Bankruptcy Court for the District of New Jersey (Judge Michael B. Kaplan), the plan administrator filed its seventh interim fee application on June 2, 2026, and the cumulative professional fee total has now crossed $98 million since the November 28, 2022 petition date. Creditor recoveries remain capped at approximately 39–42 cents on the dollar for general unsecured claimants; FTX-linked counterparty claims — previously estimated at $275 million — remain subject to the Trust's ongoing litigation, which if successful could increase distributable assets but which also carries litigation cost and duration risk (Law360 — needs verificationLLaw360 — BlockFi Seventh Interim Fee Application (aw360, June 2026 (needs verification))).

---

Recommended Actions

Creditors and claimants active across the FTX, Celsius, Voyager, Genesis, and BlockFi estates should take the following steps immediately: FTX preference targets — any entity that received transfers from FTX or its subsidiaries between August 13, 2022 and November 11, 2022 should retain preference-defense counsel now and audit their records for the "new value" defense under 11 U.S.C. § 547(c)(4) and the "ordinary course of business" defense under § 547(c)(2), both of which require contemporaneous documentation of prior trading patterns; the 140+ adversary complaints already filed signal that the Trust is proceeding systematically and without case-by-case pre-suit negotiation. Celsius creditors affected by the withholding reserve dispute should file a notice of appearance in the Adv. Pro. or in the main case to preserve standing ahead of Judge Glenn's June 20, 2026 supplemental briefing deadline, and should consider submitting a certified tax-indemnification agreement to the Litigation Administrator to establish eligibility for early partial release. Voyager claimants holding allowed claims should confirm their distribution address and tax certification are current in the claims agent portal (Stretto) before the de minimis consolidation order issues, as the protocol may affect sub-$25 residual amounts. Genesis Coin-class creditors should monitor DCG's Q2 2026 installment payment, due in late June, given the March 2026 late-payment episode; any cure-period notice should be scrutinized for acceleration-right preservation. BlockFi claimants awaiting FTX adversary resolution should not assume that outcome is imminent — litigation timelines suggest 12–18 additional months before any recovery increment flows through to creditors, and claimants should factor that uncertainty into any secondary-market claims-sale decision.

---