Jeremy Sheridan, former assistant director of the US Secret Service's Office of Investigations, warned that some FTX clients could be targeted if their personal information were made public.
In a statement filed with Delaware US bankruptcy court on April 20, Sheridan supported a debtor's motion to withhold “certain confidential information” from FTX users. According to Sheridan, who is now managing director of FTI Consulting, disclosing the names of clients ail associated with Cryptocurrency exchanges pose "serious and unusual risks of identity theft, asset theft, physical assault and further online victimization."
"If individual customer names were made public in these Chapter 11 cases, this type of information would provide potential criminals with a detailed list of vulnerable targets," Sheridan said. "In particular, it will provide criminals with a range of potential targets by disclosing a list of debtors' assets and balance sheets and the respective cryptocurrency holdings of each debtor's client." According to Sheridan, FTX users who hold large amounts of cryptocurrency would effectively "have a target on their backs" and could fall victim to fraudulent attempt scammers to access their wallets. He cites examples of common online scams conducted via email and social media, including setting up fake business and romantic relationships, SIM swapping and phishing attacks:
“Perpetrators of fraud and online attacks are inspired, motivated and attracted by high-profile cases such as Chapter 11 cases. Adding to this environment, cryptocurrency has become an attractive target for malicious actors because it Ease of settlement, instant, global and pseudo anonymous."
The legal team representing FTX's debtors released a list of creditors owed by the exchange in January. However, the names and personal information of about 10 million users have been removed. A group of media outlets, including Bloomberg and The New York Times, uch opposed s editing, claiming that the media and the public have a "right to information." Judge John Dorsey extended the time until April 20 when customer information could be redacted, also expressing concern that users could be "at risk" if their names were made public . The FTX Committee of Debtors and Unsecured Creditors filed a motion asking the bankruptcy court to re-examine the amendment order when the extension expired. A hearing on the matter is scheduled for May 17, based on objects filed.
