Doxxed FTX creditors could face identity theft and personal attacks

FTX bankruptcy creditors will face a “severe and unusual risk of identity theft, asset theft, personal attack, and further online victimization,” if they’re not kept anonymous, a former US Secret Service crypto specialist said in the latest FTX bankruptcy filing.

Jeremy A. Sheridan claimed on Thursday that revealing the details of FTX customers who possess substantial crypto holdings would be similar to “placing a target on their back and facilitating fraudulent schemes by malefactors.”

Sheridan is the managing director of a crypto/blockchain-focused practice at FTI Consulting Inc. FTI is acting as a financial advisor to out-of-pocket creditors in the FTX bankruptcy case. 

He says the likelihood of targeted crimes against the currently redacted FTX creditors will vastly increase because of the revealed information.

“In particular, it will provide malefactors with a menu of potential targets via disclosure of the debtors’ schedules of assets and liabilities list … and each of the debtors’ customers’ respective cryptocurrency holdings,” he said.

A minimum of $100 million is owed each to its 10 largest creditors while all 50 are all due upwards of $20 million.

Read more: ‘Circle Swap’ scam exploits USDC depeg fears, drains ether from wallets

Last year, the FTX bankruptcy judge kept 50 of the biggest unsecured creditors (who together are owed $3.1 billion) redacted. They would normally be made public under the US bankruptcy code. Outlets such as Bloomberg News alongside the US Trustee argued to make the names of FTX creditors public but failed.

Celsius users were previously ‘doxxed’ after judges failed to redact the user details from over 14,500 pages of filings.

Dangers facing FTX bankruptcy creditors

Sheridan highlights several different cybercrimes that could impact FTX creditors. These include pig butchering, account spoofing, business email compromise, romance scams, and phishing attacks.

He said, “Historically, these [financial fraud schemes] have been hampered by linguistic, grammatical, or content errors.

“However, the arrival and refinement of artificial intelligence programs, such as ChatGPT … has further propelled the success of these impersonation attacks by essentially eliminating previous telltale signs of poor grammar, typos, and recycled material/narratives.”

Sheridan previously created the first digital asset investigative unit for the Secret Service and has shaped regulatory responses to Terra/Luna and Celsius.

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