BlockFi Creditors Battle to Keep Their Details Secret
The legal tussle mirrors those already held for collapsed crypto lender Celsius and the FTX exchange.
BlockFi creditors are seeking to keep their personal details secret, arguing in a Tuesday court filing that they will be at risk of hacks or identity theft if their names are revealed as part of bankruptcy proceedings.
Creditors of the bankrupt crypto lender are seeking to avoid a situation seen in the case of Celsius Network – where the financial details of hundreds of thousands of users were published as part of standard judicial procedure.
Andrew Vara, a U.S. Department of Justice official responsible for bankruptcy cases, argued in a separate Tuesday filing to the New Jersey bankruptcy court that “disclosure is a basic premise of bankruptcy law” needed to avoid any suggestion of impropriety – echoing arguments he has previously made in the case of collapsed crypto exchange FTX.
A committee of BlockFi creditors said that giving away a valuable client list for free would reduce the value of the estate – and that publication would make clients vulnerable to theft, noting that even experienced Bitcoin developers such as Luke Dashr can be the subject of hacks.
In the case of FTX, the motion to publish the creditor list – which has been supported by media companies including Bloomberg and the New York Times – will be considered at a court hearing in Delaware later on Wednesday, Jan. 11. Judge Michael Kaplan is set to consider the BlockFi case at a Jan. 17 hearing.
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