Former US Secret Service Agent Helps Conceal The Identity Of FTX Creditors

Key Points:

• A US Secret Service agent specialized in cybercrime assisted in the FTX bankruptcy investigation.
• Identifying consumers of the defunct crypto exchange presents a significant and uncommon risk.
• One of the hazards they face is romance scams and the practice of pig slaughtering.

Because of the threats posed by the crooks that prowl the cryptocurrency industry, a former US Secret Service agent specialized in financial cybercrime advocated for anonymity for creditors in the FTX bankruptcy, according to a Bloomberg report.

In the five-month-old FTX bankruptcy, FTI Consulting is the financial consultant to the official committee of unsecured creditors. A court decided early in the lawsuit to keep the identities of the 50 largest unsecured creditors private. The names are typically required to be filed in public filings under the US Bankruptcy Code.

In a filing on Thursday, Jeremy A. Sheridan, managing director of FTI Consulting Inc.’s blockchain and digital assets practice, stated that identifying customers of the defunct crypto exchange “imposes a severe and unusual risk of identity theft, asset theft, personal attack, and further online victimization.”

Among the hazards he mentioned were romance frauds and a practice known as pig slaughtering. The former entails impersonating a love connection in order to steal money. Convincing individuals to load up their digital-asset accounts before stealing the money is referred to as pig butchering.

Sheridan said in the statement that he served for the Secret Service’s Office of Investigations for 24 years, rising to the position of assistant director before retiring in April 2022.

Earlier this year, the US Trustee and numerous media businesses sought unsuccessfully to make the identities of FTX customers public, saying that their names would be revealed if they were creditors in any other bankruptcy case.

Identifying consumers with larger crypto holdings is like putting a bullseye on their back and promoting fraudulent schemes by criminals, according to Sheridan.

As Coincu reported, a consortium representing millions of FTX customers and other unsecured creditors has recruited a lawyer to protect their interests in bankruptcy. In the well-publicized bankruptcy proceedings involving the crypto exchange, Paul Hastings LLP represented FTX creditors.

In the latest development regarding Sam Bankman-Fried’s once empire, a California court merged three investor complaints against the defunct cryptocurrency bank Silvergate Bank, as well as FTX.

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Harold

Coincu News