1 year ago
Angel capitalist Stephen Cole labeled a website providing searchable information connected Celsius users’ losses “a perfectly horrendous illustration of the risks of KYC.”
CeFi lender Celsius filed for Chapter 11 bankruptcy connected July 13, pursuing liquidity problems triggered by the Terra ecosystem implosion. It aboriginal emerged that the steadfast was engaged successful high-risk trading strategies, resulting successful dense losses.
As portion of its bankruptcy procedure, the steadfast precocious filed a 14,000-page document listing creditors’ details, including accusation connected its users. The papers has since been removed.
In response, galore successful the crypto assemblage blasted the move, with immoderate accusing the CeFi lender of intentionally doxing users.
The outcry has extended to a treatment astir the reasonableness of complying with Know Your Customer (KYC) requirements.
U.S. bankruptcy procedures
Under Chapter 11 bankruptcy rules, a “Creditor Matrix,” oregon database of creditors’ names and addresses, is required for nationalist record. The tribunal uses this to nonstop notices and claims information for an unfastened and transparent bankruptcy process.
In respect of Celsius users, the papers showed names, coin quantity, and coin value, among different details. However, addresses were redacted astatine the company’s request.
Nonetheless, immoderate pointed retired that the accusation could beryllium cross-referenced with details from the Ledger leak to place and people circumstantial crypto holders.
Celsius x Ledger leaks are large for anyone looking for casual $5 wrench onslaught targets
Export 14k pages of names from the Celsius, past lucifer names with 250k names from the Ledger leak
You present person a afloat name, address, email, telephone number, and fiscal info of a LOT of people
— fbslo (@fbsloXBT) October 7, 2022
In December 2020, information belonging to Ledger hardware wallet customers was leaked to a hacking website. The information included names, postal addresses, telephone numbers, and emails. At the time, immoderate victims reported being threatened via telephone and email.
Fears are Celsius users could look the menace of unit and robbery pursuing the “doxing” and the consequent rollout of a searchable website showing balances held with the firm.
https://t.co/xGOP9tUhIU pic.twitter.com/TYDVMukpbK
— Jesse Peltan (@JessePeltan) October 7, 2022
How close is the website?
Twitter idiosyncratic @charlestrussel posted a screengrab of the apical 10 astir sizeable balances held with Celsius – it showed that the astir important idiosyncratic nonaccomplishment was $40.7 million.
holy moly pic.twitter.com/Fnao3UY2V7
— chortly (@charlestrussel) October 9, 2022
Interestingly, according to the website, erstwhile Celsius CEO Alex Mashinsky was shown arsenic losing $15,000, a comparatively tiny sum fixed the standard of losses.
However, @former68w chimed successful to say, having searched himself, it appears the website is not accurate. He concluded that either the documents filed with the tribunal were fraudulent oregon determination was an mistake successful the compilation of information connected the website. Another mentation is that Celsius’ records are not up to date.
This website isn't accurate. I had a Celsius relationship successful 2018. Closed the relationship years ago. Website says I mislaid a fewer 100 $? Cannot beryllium accurate.
Either Celsius filed fraudulent documents to the tribunal oregon the website operators utilized the incorrect data.
— deprecated (@former68w) October 9, 2022
Others person expressed akin inaccuracies, which casts uncertainty connected the precision of the creditor payout process.
The station ‘Horrendous’ KYC risks connected amusement arsenic website detailing Celsius users’ losses goes live appeared archetypal connected CryptoSlate.
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