Celsius Network Creditors Fears Fallout After Bankruptcy Document Submission

Creditors of bankrupt Celsius Network have been on the edge after the crypto lender submitted a pile of documents containing its creditors’ information as part of its ongoing bankruptcy process. 

These creditors fear that this act might expose them to cyber fraud, doing, and other forms of cyber threats. Before this time, Celsius and its creditors had attempted to avoid the submission of these crucial documents. Several times when the documents were requested, they had arguments before the judge.

Meanwhile, such a Chapter 11 bankruptcy process does not give a promise of non-disclosure of creditor information. It is expected from the judge presiding over the process. Rick Hyman, a partner at Crowell & Moring, who has represented several lenders in Chapter 11 proceedings, commented on this subject.

“It’s a fundamental principle of U.S. bankruptcy law that there is full disclosure. Full disclosure includes not just information that is essential to the debtors’ operations, but also to the identity of the creditors,” Hyman said.

Celsius Network Request That Users Name be Redacted

Since the beginning of the Celsius Network bankruptcy process, the crypto lender has submitted a ton of documents based on the request of the judges. Only last week, its total filing came up to about 14,000 pages.

One of its recent submissions contained the names and a list of its customers’ trading history including the recent claim that the firm’s former CEO Alex Mashinsky withdrew $10 million before Celsius Network froze customers’ accounts.

Dates of transactions, usernames, and transaction amounts were also included in the filings. This makes it easier for the transactions to be traced and identified. Precisely, users’ names can be connected to their anonymous digital wallets to ascertain their crypto portfolio and retrieve other information.

Noteworthy, the documents do not contain users’ personal information like email or home addresses. Although this information can be gotten through other means especially after such information had been published following the Ledger data leak.

Additionally, Celsius Network requested that the identities and names of its users should not be made public. However, the court refused while reminding the crypto lender that it is only part of the bankruptcy process.