- Names of around nine million customers in FTX are involved in the bankruptcy case but will remain hidden for at least three months
- Judge John Dorsey is hesitant about the disclosure of names as it could put creditors “at risk”
- FTX lawyers argued that exposing the names will cause “identity theft or unlawful injury to the individual”
Following the bankruptcy court on January 11 in Delaware, Judge Jack John Dorsey approved FTX lawyers’ request not to share the information of nine million customers publicly. On January 8, FTX – the cryptocurrency exchange – continued the Chapter 11 bankruptcy process, filling a 168-page document.
Judge Dorsey gave room for FTX regarding the disclosure of the affected customers. The judge said he is doubtful about giving up the names because it would put the creditors at higher risk. This directly refers to the pressure from competitors and mainstream media who want the names of users involved in the downfall.
Meanwhile, non-US users of FTX demand that their names and all information regarding them be redacted from the court documents. According to them, disclosing the names of FTX customers to the general public will do more harm than good, as some have already been scammed via fake websites and suspicious application forms. Having their data up for everyone may cause identity theft and doxxing.
The Proceedings So Far
Despite all the fears regarding public exposure of information, John Schanne of the Department of Justice said that the debtors only want to have their names redacted.
He said the following regarding the Bankruptcy Court, which protects individuals:
“So what are we talking about here? We’re talking about individuals. And concerning those individuals, we are sensitive to the concerns. We understand. The Bankruptcy Rules, the local rules, require complete disclosure. The debtors and the committee have offered evidence that, if you identify all of that information, there are real concerns. We’re not asking for that.”
“We’re asking just for submission of the creditor names,” Schanne said. “We have not opposed redaction concerning individuals of other identifying information, just the names. The Friedler declaration admits that just the names may not be sufficient concerning common names, right?”
Meanwhile, the court has been frank with equity holders of FTX, telling them that their accounts will get wiped out. The investors include NFL star Tom Brady, supermodel Gisele Bundchen, and Shark Tank personality Kevin O’Leary.
As for former FTX CEO Sam Bankman-Fried, his trial remains to be seen on October 2 this year, but he has been proactive on Twitter, communicating with the crypto community about the state of his former company and the plans on recovering money for the affected individuals.
In a reply regarding the slow rise of Bitcoin since its dip in November, he tweeted,
“Yup, that is always the best recovery scenario for customers. They being made substantially whole is a real possibility; we were a few weeks away from getting there in November (the US is solvent, which should make everyone whole).
Since the beginning of January, Bitcoin has slowly recovered from $16,500 up to $21,000, as many suspect that the bankruptcy filings continue to progress, with FTX recovering $5 billion worth of assets and counting.
