{"id":8031,"date":"2022-10-23T20:04:03","date_gmt":"2022-10-23T20:04:03","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=8031"},"modified":"2022-10-23T20:04:04","modified_gmt":"2022-10-23T20:04:04","slug":"celsius-users-concerned-over-personal-info-revealed-in-bankruptcy-case","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=8031","title":{"rendered":"Celsius users concerned over personal info revealed in bankruptcy case"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Crypto lending platform Celsius filed for Chapter 11 bankruptcy on July 13, 2022. Although the Celsius case involves digital assets, it remains subject to United States Bankruptcy Code under the Bankruptcy Court for the Southern District of New York.\u00a0<\/p>\n<p>While this may be, a series of unusual events have ensued since Celsius filed for bankruptcy. For instance, Chief United States Bankruptcy Judge Martin Glenn \u2014 the judge overseeing the Celsius case \u2014 stated on Oct. 17 that the court will look abroad for guidance. <\/p>\n<p>Glenn specifically mentioned that \u201cLegal principles that are applicable in the United Kingdom are not binding on courts in the United States,\u201d yet he noted that these \u201cmay be persuasive in addressing legal issues that may arise in this case.\u201d While the treatment of the Celsius case will abide by U.S. bankruptcy laws, Glenn still aims to determine how the Celsius case should be handled. <\/p>\n<p>Additionally, publicly available court documents related to Celsius\u2019 bankruptcy proceedings have revealed personal data from thousands of the platform\u2019s customers. A large financial disclosure form filed on Oct. 5 contains customer names, account balances, timing of transactions and more. <\/p>\n<p>While this may have come as a shock to Celsius users, releasing this information is subject to U.S. Bankruptcy Code. Adam Garetson, general counsel and chief legal officer at WonderFi Technologies, a regulated cryptocurrency exchange based in Canada, told Cointelegraph that bankruptcy proceedings should be open, public and transparent:<\/p>\n<p>\u201cIt is a strong way of avoiding any suggestion of impropriety by the courts and the persons and entities involved in the proceeding. As such, courts can make requests and impose orders on the bankrupt entity, including with respect to release of information which is available publicly.\u201d<\/p>\n<p>Yet, it is unusual that committee investigations have revealed such a large amount of customer information. This point was highlighted in an article from The National Law Review published on Oct. 18, which states, \u201cDebtor filings and Committee investigations have revealed a great deal more to the public about the Debtors\u2019 financial affairs, insider activity, and the path and direction of the bankruptcy case.\u201d The article also states that even though so much personal information has been disclosed, \u201cthere is still little indication of how claims will be treated and repaid in this case.\u201d\u00a0<\/p>\n<h2>Celsius users face unintended consequences<\/h2>\n<p>While Celsius customers continue to wait for decisions to be made by the U.S. Bankruptcy Court, the release of personal information has resulted in additional stress. To add insult to injury, customer data was recently made public on a website called Celsiusnetworth.com.\u00a0<\/p>\n<p>The website allows anyone to search Celsius users by their name to reveal their losses, along with the cryptocurrencies they had invested on the platform. If this wasn\u2019t bad enough, the website includes a leaderboard that lists customers in terms of rankings for the greatest losses. Customer information can then be tweeted from the website, as a tweet button appears once user information is shown. <\/p>\n<p>The creators of Celsiusnetworth.com \u2014 who go by the name &#8220;Avnx&#8221; \u2014 told Cointelegraph that the website was built using the public data published as a result of Celsius&#8217; legal operations. The source further remarked that the data on the website shouldn\u2019t be considered as a leak, although they noted that releasing this information may have consequences similar to the Ledger data leak that occurred in Dec. 2020. \u201cThis data has been made public by Celsius. Whether we like it or not, it is a fact,\u201d Aznx said.\u00a0<\/p>\n<p>According to Garetson, sites like these are uncommon when it comes to bankruptcy proceedings. However, he mentioned that such occurrences may arise from high-profile events that generate specific media attention, or the attention of a particular community. Indeed, Avnx mentioned that Celsiusnetworth.com was designed to create a \u201cbuzz,\u201d rather than making it easy for individuals to explore losses of Celsius Creditors. Avnx said: <\/p>\n<p>\u201cFor example, the Twitter button is a humorous approach, although nothing is funny in these events. Yet this creates a buzz to highlight several things, such as the fact that this\u00a0information has been revealed, the amounts lost, or the balances of certain strategic people within Celsius.\u201d<\/p>\n<p>In any case, the information revealed via the Celsiusnetworth.com website has resulted in unintended consequences for many Celsius users.\u00a0<\/p>\n<p>For example, John Carvalho Jr., a Celsius user based in Massachusetts, told Cointelegraph that his personal information released on Celsiusnetworth.com resulted in a large amount of chaos, particularly on Crypto Twitter. <\/p>\n<p>Carvalho explained that he has the same name as the CEO of Synonym, which is a Bitcoin (BTC) software company. As a result of information being made public, multiple users on Crypto Twitter assumed that John Carvalho \u2014 the CEO of Synonym \u2014 had invested thousands of dollars on Celsius. This created an uproar on Twitter, as users started accusing the CEO of \u201cbuying altcoins,\u201d among other things. Carvalho said:<\/p>\n<p>\u201cI joined Twitter in 2020 but didn\u2019t use it much. However, on the morning of Oct. 10, I was tagged multiple times, as Crypto Twitter had confused me for John Carvalho, CEO of Synonym. Users were talking lots of trash, accusing John Carvalho of being a \u2018shitcoiner\u2019 and calling him a \u2018dummy.\u2019\u201c<\/p>\n<p>\u201cI had no idea who John Carvalho was. It\u2019s unfortunate that user information was leaked initially, but this was made even worse when it spread on Twitter,\u201d he added.\u00a0<\/p>\n<p lang=\"en\" dir=\"ltr\">I jumped to conclusions on the Celsius list, attributing the John Carvalho to @BitcoinErrorLog. <\/p>\n<p>This was wrong and I apologise to John for this, a lesson learned.<\/p>\n<p>\u2014 Peter McCormack \u200d\u2620\ufe0f\ufe0f\u200d (@PeterMcCormack) October 10, 2022<\/p>\n<p>Carvalho noted that the situation was clarified following a tweet sent from the Synonym CEO\u2019s personal account, which referenced the mixup.\u00a0<\/p>\n<p lang=\"en\" dir=\"ltr\">Meet @JohnCarvalho. We have the same name, but recently some shitcoiners tried to use his misfortune to smear my reputation.<\/p>\n<p>John has a new baby girl and lost everything on Celsius. So I am asking you to help by donating some BTC to him here:<\/p>\n<p>3Q5m2LTLZABvELbqUvSRmQnFFA8z2vP2qb pic.twitter.com\/ViM5OIYdSh<\/p>\n<p>\u2014 John Carvalho (@BitcoinErrorLog) October 10, 2022<\/p>\n<p>Carlos DePaz, a Celsius user and certified public accountant, told Cointelegraph that, while he thinks it&#8217;s unfortunate that user information has been made public, he doesn\u2019t feel personally impacted.\u00a0<\/p>\n<p>\u201cIf I was number one on the leaderboard list on the website, I may feel differently. It may be embarrassing for those individuals for others to know how much money they lost. But for me personally, it\u2019s not a big deal. It\u2019s a live and learn situation,\u201d he said. <\/p>\n<p>Another Celsius creditor who wishes to remain anonymous told Cointelegraph that, while he wasn\u2019t impacted by public information being leaked, he believes this specific situation violates user privacy:<\/p>\n<p>\u201cI am not sure if information of this sort is always public knowledge in similar cases, but it definitely feels like a violation of privacy being that the information is financial by nature.\u201d<\/p>\n<h2>Lessons learned<\/h2>\n<p>While it\u2019s unfortunate that Celsiusnetworth.com was created as a result of publicly available user information, this demonstrates the need for further education and regulatory clarity within the cryptocurrency sector.\u00a0<\/p>\n<p>For instance, DePaz shared that he initially viewed Celsius as a legitimate crypto lending platform, stating, \u201cCelsius was partially intriguing because the website and regular ask-me-anything segments seemed very legitimate. It seemed like Celsius was run by people who knew what they were talking about, as they mentioned the platform was licensed.\u201d <\/p>\n<p>Carvalho added that he viewed Celsius as an opportunity to build financially for the future of his family: \u201cI would regularly listen to the ask-me-anything segments and would hear Celsius say \u2018put your money with us and we will give you yield.\u2019 I didn\u2019t realize the risks involved at the time.\u201d<\/p>\n<p>Ben Samaroo, CEO of WonderFi Technologies, told Cointelegraph that what\u2019s unique about the Celsius case is that a lot of disclosure wasn\u2019t initially provided to customers. He said: <\/p>\n<p>\u201cHigh returns were being promised, yet the risks that came with that may have not been disclosed or understood by customers. This especially could have been the case for entry-level users, but it also impacted those who had already been in the industry.\u201d\u00a0<\/p>\n<p>While Samaroo is responsible for operating a regulated cryptocurrency exchange based in Canada, he pointed out that WonderFi was also put under pressure from investors during the 2021 bull run to offer lending products similar to Celsius, stating, \u201cWe couldn\u2019t do this anyway, as this would have required us to go through regulators in Canada. We would have needed to present a plan and do risk assessments, while making sure safeguards and investor protections were in place.\u201d\u00a0<\/p>\n<p>The current state of the Celsius case also demonstrates that platforms involving digital assets are still subject to traditional U.S. laws. Shedding light on this, Garetson mentioned that this case is yet another example that broad, formal regulation in the U.S. over the crypto asset sector remains pending. <\/p>\n<p>\u201cTraditional legal concepts like contracts, property and bankruptcy law continue to apply regardless of the status of any \u2018crypto\u2019-specific law,\u201d he said. As a result, Garetson noted that the outcomes of the Celsius case are going to be determined in real-time \u2014 not by congress or a panel of experts, but rather by individual courts who are likely less familiar with the industry. \u201cThis emphasizes a greater need for thoughtful and harmonized regulation in the near term, particularly as it relates to oversight of centralized trading platforms,\u201d he said. <\/p>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/celsius-users-concerned-over-personal-info-revealed-in-bankruptcy-case\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto lending platform Celsius filed for Chapter 11 bankruptcy on July 13, 2022. Although the Celsius case involves digital assets, it remains subject to United States Bankruptcy Code under the Bankruptcy Court for the Southern District of New York.\u00a0 While this may be, a series of unusual events have ensued since Celsius filed for bankruptcy. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8032,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-8031","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8031","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8031"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8031\/revisions"}],"predecessor-version":[{"id":8033,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8031\/revisions\/8033"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/8032"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8031"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8031"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}