FTX customers ask bankruptcy court to keep their names secret

 

FTX customers outside the US have requested anonymity with the bankruptcy court to avoid any potential for data breaches or other scams

A group of FTX customers based outside the United States have asked a US bankruptcy judge to keep their names secret during the cryptocurrency exchange's bankruptcy case, saying that revealing their identities could expose them to identity theft and other scams. may have to face.

Insolvent companies typically disclose the names and amounts of debts held by their creditors, including individual customers.

But in court filings late Wednesday, non-U.S. A group of FTX clients said they are owed $1.9 billion told bankruptcy judge John Dorsey that this case is different.

He also warned that the disclosure could undermine FTX's efforts to sell parts of its business, which it seeks to do to make more money available for creditors.

“Cryptocurrency holders are particularly vulnerable to fraud and theft because cryptocurrency is difficult to trace and there are fewer safeguards in place to protect assets,” the group wrote.

FTX, once led by Sam Bankman-Fried, is also seeking an exception that would keep the names of its clients secret.

U.S. of that request The bankruptcy watchdog of the Department of Justice, as well as various media including the New York Times and the Wall Street Journal, have protested.

Customer privacy has been an issue in other crypto-related bankruptcies.

In October, for example, the judge overseeing the bankruptcy of Celsius Network ruled that customers' names must be revealed, but their addresses and email addresses can be kept secret.

Two years ago, Dorsey let crypto lender Cred's customer list remain secret in order to preserve Cred's ability to "market and sell that list" as part of a possible sale of the company.

Dorsey will hear arguments on customer privacy at a hearing scheduled for January 11 in Wilmington, Delaware. They have asked a committee representing all FTX creditors to weigh in.

Lawyers for the official FTX creditors committee did not immediately respond to a request for comment on Thursday.