Debifi

The private credit default rate just hit 9.2%. That is higher than the peak default rate on bank loans during the 2008 financial crisis. This market has $1.8 trillion in assets and roughly $100 billion in secondary liquidity. That is an 18 to 1 mismatch between money in and money that can get out. Private credit exploded over the past decade because banks pulled back after Dodd-Frank. Pension funds, endowments, and insurance companies piled into it looking for yield. The loans are mostly floating rate, which means every Fed hike pushed borrowers closer to default. The default rate averaged 2-3% for years. It hit 8.1% in 2024. Now 9.2%. Nobody is ringing alarm bells because these loans do not trade on public markets. There is no ticker to watch. No daily mark to market. The losses are sitting in quarterly reports that most people never read. $1.8 trillion in illiquid loans with a 9.2% default rate and no secondary market. If a handful of large funds try to exit at the same time, there is no buyer on the other side.

BlockFills just filed for Chapter 11 bankruptcy. $50-100 million in assets against $100-500 million in liabilities. BlockFills was a Chicago-based institutional crypto trading and lending firm backed by Susquehanna, CME Ventures, and Nexo. They processed over $60 billion in trading volume in 2025 and served around 2,000 institutional clients including hedge funds, asset managers, and mining companies. Here's the timeline of how it unraveled: February 11 - BlockFills halts all customer withdrawals and deposits, citing "market and financial conditions." Late February - CoinDesk reports the firm lost approximately $75 million. CEO and co-founder Nicholas Hammer steps down. Early March - Dominion Capital sues, alleging BlockFills misappropriated customer crypto assets, commingled client funds with operational funds, and concealed significant losses. A federal judge issues an emergency order freezing BlockFills' bitcoin holdings. March 15 - Chapter 11 filed in Delaware. Reliz Ltd. and three affiliated entities enter bankruptcy. The pattern is identical to every crypto lending blowup we've seen. Aggressive leverage in derivatives, counterparty risk exposure to other struggling firms, client funds not properly segregated, and losses hidden until they couldn't be hidden anymore. This is what happens when you hand your bitcoin to a third party and trust them to manage the risk. Not your keys, not your coins isn't a meme. It's a risk management framework. The firm's own backers include some of the biggest names in traditional finance. Susquehanna and CME Ventures did their due diligence and still got it wrong. If they can't assess counterparty risk in this market, what chance does a retail investor have? The answer is simple. Stop trusting intermediaries with your bitcoin.