Major media outlets such as The New York Times, The Financial Times, and Bloomberg have recently appealed to the court in FTX‘s bankruptcy case to release a list containing the names of over 9 million FTX customers and creditors. The reason behind the request lies in fostering transparency in the legal process; however, the crypto community has raised concerns regarding the potential risk of these customers becoming targets for scammers.
One particular scam that has many worried is the so-called “pig butchering” scam or, in Chinese, sha zhu pan. This type of scam involves manipulating the victim over the long term, coercing them into divulging crucial financial information. With the development and rise of artificial intelligence (AI) technologies, these scams have become significantly easier to execute on a larger scale.
Until now, the bankruptcy court in the FTX case has kept the customer list sealed, primarily due to the risk of scammers exploiting the data. However, as the 90-day deadline for renewing the seal approaches, the media outlets are eager to see the names released. They argue that there’s no legal foundation for allowing crypto users to participate in bankruptcy proceedings anonymously.
FTX representatives have pushed back, highlighting that crypto users are particularly susceptible to scams when their personal information becomes public. They stated that AI tools like ChatGPT have made long-term scams, like the “pig butchering” method, far more efficient. Furthermore, they point out that customers of the now-bankrupt crypto lender Celsius have already been targeted by scammers.
Nevertheless, the media outlets requesting access to the customer lists maintain that crypto users shouldn’t receive special protection from public scrutiny. They argue in their filing that, despite scam attempts, there’s no evidence of any individuals named in the Celsius litigation falling victim to identity theft or lose their crypto assets.
As the debate over the anonymity of crypto users and the potential risk of scammers targeting them continues, a broader question emerges: How can the crypto community strike a balance between transparency in legal proceedings and safeguarding user data? By considering the implications and weighing the pros and cons, regulators and the crypto-sphere can strive to establish a framework that upholds both security and accountability.
Source: Cryptonews
