Court filing ‘doxing’ Celsius users draws questions on KYC, bankruptcy processes
Disgraced CeFi Lender Celsius Filed Oct. 5 the schedule of Assets and Liabilities and Financial Statements as Part of Chapter 11 Bankruptcy Proceedings.
most of the over 14,000 page document Relates to information about Celsius creditors, such as the user’s name and transactions on the Platform.
Crypto Twitter denounced this document for “exposed” users. For example, YouTuber Coffeezilla said the move was a lousy move, notably that former CEO Alex Masinsky allegedly withdrew his $10 million before freezing customer accounts on June 13. I said it soon after it became clear.
Celsius exposed all its users, and by the way, it turns out that the CEO withdrew $10 million just before bankruptcy.
— Coffeezilla (@coffeebreak_YT) October 6, 2022
Questions have also been raised about the merits of Know Your Customer (KYC) requirements and whether user disclosure is necessary, especially given the situation of lender downfall.
Celsius files public documents containing user information
Despite the fallout, under the Chapter 11 Bankruptcy Rules, “creditor matrix, or a list of names and addresses of creditors is required for public records. Courts use this information to send notices and claim data to keep the bankruptcy process open and transparent.
and Court submission Date September 28, Celsius requested editing User’s Personally Identifiable Information.
The creditor list is divided into two types: commercial creditors and Celsius owed users. The information about the former is complete, but the Celsius user’s address has been redacted.
Thus, user “exposing” is due to US bankruptcy law, not malicious intent on the part of Celsius.
Nonetheless, some Celsius users who have never gone through bankruptcy proceedings expressed their dissatisfaction with the process via social media.
know your customers
Financial services firms use KYC standards to verify customers and assess risk profiles.Countermeasure counter Fraud, Corruption, Money Laundering and Terrorist Financing.
Critics say the process is intrusive and violates individual privacy rights. However, in recent years, the cryptocurrency industry has come under increased pressure to comply, due to directives from the intergovernmental organization Financial Action Task Force (FATF).
Regarding the “doxising” of Celsius, the CEO said: luxor mining, Nick Hansen,how’s it going” A perfect demonstration of why KYC only hurts honest consumers“
Additionally, CoinDesk Writer Zach Voell We have turned things around and raised our voices by portraying KYC as “illegal” here.
KYC is illegal
— Zack Voell (@zackvoell) October 7, 2022
The issue has rekindled debates about the general merits of KYC, such as the security of personal data held on CeFi platforms and whether DeFi, which does not require KYC disclosure, could be the solution.
a FATF Report We mentioned that we are working on a new standard to incorporate rules governing DeFi and NFTs, effective June 2022.
