BlockFi Creditors Plead For Privacy In Bankruptcy Proceedings To Avoid Hacks, Identity Theft

Zinger Key Points
  • Committee of BlockFi creditors argue publication would decrease value of estate and increase vulnerability to theft.
  • Court to weigh principle of transparency against potential risks to creditors' personal information.

Creditors of cyptocurrency lender BlockFi have pleaded to keep their personal information private in court documents.

Disclosing their names as part of the bankruptcy proceedings could put them at risk of identity theft or hacking, they claim.

The peculiar request is a result of a similar incident involving another cryptocurrency lender, Celsius, in which the financial information of tens of thousands of users was made public as part of customary legal procedure.

Also read: Investment In CryptoZoo Token Earns 1000% Return In 14 Days: Is There Hope For Logan Paul's Crypto Project?

In a separate filing to the New Jersey bankruptcy court, Andrew Vara, a U.S. Department of Justice official in charge of bankruptcy cases, argued that disclosure, which he previously asserted in the case of the defunct cryptocurrency exchange FTX, is "a basic premise of bankruptcy law," and required to avoid any suggestion of improper behavior.

However, the potential repercussions of having their private information made public worries BlockFi's creditors.

According to a committee of BlockFi creditors, giving away a priceless client list for free would lower the estate's worth and make them more susceptible to theft.

They used the example of seasoned Bitcoin BTC/USD developers like Luke Dashr, who had been the target of attacks in the past.

The creditors argue that by keeping their personal information private, they will be better able to defend themselves against any dangers.

Judge Michael Kaplan will hear arguments on the motion to publish the creditor list in the FTX case on Jan. 11, and the judge is scheduled to hear arguments in the BlockFi case on Jan. 17.

In order to better safeguard themselves from any potential dangers, creditors of BlockFi are hopeful that their case would be handled differently from those of Celsius and FTX and that their personal information will be kept secret.

Next: Metropolitan Bank Announces Full Exit From Crypto-Asset Industry: What It Means To Customers

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CryptocurrencyNewsLegalMarketsTechBlockFiFTXHacks and identity theftLuke Dashr
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!