Former US Secret Service agent cites crypto crime to back anonymity for FTX creditors
A FORMER US Secret Service agent who specialises in probing financial cybercrime supported anonymity for creditors in the FTX bankruptcy because of risks from the criminals who stalk the cryptocurrency sector.
Identifying customers of the fallen crypto exchange “imposes a severe and unusual risk of identity theft, asset theft, personal attack, and further online victimisation”, Jeremy A Sheridan, managing director in the blockchain and digital assets practice of FTI Consulting, said on Thursday (Apr 20).
FTI Consulting is the financial adviser for the official committee of unsecured creditors in the five-month-old FTX bankruptcy. Early in the case, a judge agreed to keep the names of the 50 biggest unsecured creditors secret. The US Bankruptcy Code normally requires the names be filed in public documents.
The US Trustee and several media companies, including Bloomberg News, unsuccessfully fought to have the names of FTX customers made public earlier this year, arguing that their names would be listed if they were creditors in any other bankruptcy case.
Naming customers with bigger crypto holdings is like “placing a target on their back and facilitating fraudulent schemes by malefactors”, Sheridan said.
Romance scams and a practice known as pig butchering were among the threats he highlighted. The former involves pretending to be in a romantic relationship to steal money. Pig butchering refers to convincing people to fill up their digital-asset accounts before purloining the proceeds.
Sheridan said that he worked for the Office of Investigations at the Secret Service for 24 years until April 2022, rising to assistant director, before retiring. BLOOMBERG
Share with us your feedback on BT's products and services
