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

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.

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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.

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