Jeremy Sheridan, former deputy director of the US Secret Service's Office of Investigations, warned that certain FTX clients could become targets if their personal information became public.
In an April 20 deposition filed with the US Bankruptcy Court for the District of Delaware, Sheridan supported a motion by the debtors that it would withhold "certain confidential information" from FTX users. According to Sheridan, who is currently managing director of FTI Consulting, disclosing the names of clients associated with the failed crypto exchange poses "a serious and unusual risk of identity theft, asset theft, personal attack, and further online victimization."
โIf the Names of Individual Clients are made public in these Chapter 11 Cases, such information will provide potential wrongdoers with a detailed list of vulnerable targets,โ Sheridan said. โIn particular, it will provide wrongdoers with a menu of potential targets through disclosure of debtors' assets and liabilities list. [...] And each of the Debtors' customers' respective cryptocurrency holdings.โ
FTX users holding large amounts of cryptocurrency, according to Sheridan, would effectively have โa target on their backโ and could fall victim to fraud by scammers looking at their wallets. She cited examples of common online scams carried out via email and social media, including building fake business and romantic relationships, SIM card swapping, and phishing attacks:
โOnline fraud and attack perpetrators are emboldened, motivated and attracted by high-profile cases like the Chapter 11 Cases. Adding to this environment is the fact that cryptocurrency is already an attractive target for criminals because it is easy to to liquidate, instantaneous, global and pseudoanonymousโ.
The legal team representing FTX debtors published a list of creditors money owed for the exchange in January. However, the names and personal information of approximately 10 million users had been redacted. A group of news outlets, including Bloomberg and The New York Times, have opposed the wordingalleging that the press and the public had a โright of accessโ to the information.
Related: FTX CEO Says He Is Exploring Rebooting The Exchange: Report
Judge John Dorsey extended the time that customer information could be redacted until April 20, also expressing concern that users could be "at risk" with their names being made public. FTX debtors and the unsecured creditors committee filed a motion as the extension was about to expire requesting that the bankruptcy court review the drafting order. The matter is scheduled for a hearing on May 17, depending on the objections filed.
Magazine: Can You Trust Crypto Exchanges After FTX Crash?
Post navigation
/cdn.vox-cdn.com/uploads/chorus_asset/file/24601509/Aja_Singletary_and_Ashli_Rene_Funches__credit_Fadeout_Media.jpeg "A torrent of revenge is unleashed in A Red Orchidโs unflinching โIs God Isโ")