FTX customers ask bankruptcy court to keep their names secret

A bunch of FTX clients from exterior the United States have requested a U.S. chapter decide to maintain their names secret through the cryptocurrency trade’s chapter case, saying that revealing their identities might expose them to id theft and different scams.

Bankrupt corporations usually reveal the names and quantities of debt held by their collectors, together with particular person clients.

But in a late Wednesday night time court docket submitting, a bunch of non-U.S. FTX clients who say they’re owed US$1.9 billion advised U.S. Bankruptcy Judge John Dorsey that this case is completely different.

They additionally warned that disclosure might undermine FTX’s efforts to promote components of its business, which it needs to do to earn more money out there for collectors.

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

FTX, as soon as led by Sam Bankman-Fried, can be in search of an exception that might preserve its clients’ names secret.

That request has been opposed by the U.S. Department of Justice’s chapter watchdog, in addition to varied media together with the New York Times and Wall Street Journal.

Customer privateness has been a problem in different crypto-related bankruptcies.

In October, for instance, the decide overseeing Celsius Network’s chapter dominated that buyer names have to be revealed, however their addresses and e mail addresses might be saved secret.

Two years in the past, Dorsey let the shopper checklist of crypto lender Cred stay secret, to protect Cred’s skill to “market and sell that list” as a part of a attainable sale of the corporate.

Dorsey will hear arguments on buyer privateness at a Jan. 11 listening to in Wilmington, Delaware. He has requested a committee representing all FTX collectors to weigh in.

Lawyers for the official FTX collectors committee didn’t instantly reply to a request for touch upon Thursday.

(Reporting by Dietrich Knauth; Editing by David Gregorio)