The names of up to nine million FTX users will remain under wraps for at least three more months in the bankruptcy proceedings of the insolvent crypto exchange.
This was the decision of the presiding judge John Dorsey of the responsible bankruptcy court in the US state of Delaware on January 11th. The FTX had on January 8th in a 168 page long application asked, among other things, that user information continues to be treated confidentially.
Judge Dorsey is also “reluctant at this point” to disclose the confidential information in the process, thereby exposing customers and/or creditors to unnecessary “risk.” However, the media in particular had recently called for such disclosure for reasons of transparency. The judge replies:
“This is about people who are not directly present, people who could be at risk if their names and personal information are disclosed.”
In the previous days, FTX’s attorneys had argued that “disclosure of customer information would create an unnecessary risk of identity theft or other harm to individuals,” prompting the court to use the full extent of its confidentiality powers under U.S. banking law, to protect FTX customers.
In late December, non-US FTX users also asked the Delaware bankruptcy court that user information should remain private to avoid “irreparable harm.”
However, it is worth noting that Judge Dorsey’s decision stands in stark contrast to current practice in bankruptcy proceedings, where creditors’ information is typically disclosed, including in bankruptcy proceedings bankruptcy proceedings crypto savings platform Celsius in October.
The shareholders of FTX, on the other hand, do not enjoy the protection of the bankruptcy court, because on January 9 their data was already available disclosedincluding detailed information on the number of shares held by each shareholder.
Among the shareholders are well-known names such as legendary football player Tom Brady, his ex-wife and top model Gisele Bundchen, entrepreneur Peter Thiel and financial expert Kevin O’Leary.
After all, the FTX seems to be making the first progress in processing its collapse, so it could now probably account for 5 billion US dollars in customer funds retrieved as lawyer Andy Dietderich announced yesterday, January 11th.
According to the first court documents from November more than 1 million creditors be affected by the collapse of the major crypto exchange.