Celsius, a cryptocurrency lender, is facing criticism for disclosing the recent financial activities and data of the users in CeFi. The file received by the public court includes personal details of co-founders Dan Leon, Nuke Goldstein, and Alex Mashinsky’s trading, along with the user names, transaction dates, account types, and digital assets.
However, in accordance with federal court regulations, a small amount of personal information can be redacted. Celsius and a group of creditors requested the jurisdiction to obscure personal information like name and address in public filings. A motion has been filed by Celsius, citing the safety concerns of the users.
William Harrington, a US Trustee, rejected the lender’s request stating that it would violate the law that mentioned bankruptcy proceedings should be “open and transparent.” He added that the movant should have a strong reason to justify such a request; otherwise, unintended consequences may arise to unfavorable individuals in the crypto world due to an incomplete statement.
Michael Pearl, COO of smart transaction development, said this incident shows the threatening drawback of CeFi. Though DeFi offers transparency for transactional information, it does not reveal personal information to the wallet. In contrast, the information in CeFi can easily be exposed.
The latest reveal had alarmed investors about the threat of information leaks. They have to be vigilant to store cryptocurrency in safe hands.