Court Supports FTX’s Request to Remove Customer Names from Bankruptcy Filings
Bankrupt cryptocurrency exchange FTX has secured court permission to remove the names of its customers from all filings in its bankruptcy case.
The US Bankruptcy Judge John Dorsey in Wilmington, Delaware, has concluded that publishing the names of individual customers could put them at risk of scams and identity theft, Reuters reported Friday.
The judge had already allowed FTX to keep the names of 9 million individual customers secret for the first three months of 2022.
The court has now granted permission to completely redact the names of all customers from its bankruptcy filings permanently.
Dorsey made it clear that FTX should prioritize customer safety and make sure they don’t fall victim to scams.
“It is the customers who are the most important issue in this case,” he said. “We want to make sure that they are protected and they don’t fall victim to any types of scams.”
The court also granted permission to FTX to remove names of companies and institutional investors from its customer lists temporarily. The exchange will have to make another request in 90 days if it wants to keep them redacted.
While the judge noted corporates and institutional investors of FTX do not face identity theft, their names could be valuable property if the company decided to sell its customer list as a whole or separately in the future.
It is worth noting that the FTX bankruptcy case has been complicated by a long-standing dispute between the exchange’s US bankruptcy team and liquidators overseeing the shut-down of FTX’s Bahamian affiliate, FTX Digital Markets.
On Friday, the judge asked both sides to seek mediation and cooperate to prevent inconsistent rulings in separate court proceedings in the US and the Bahamas.
Dorsey rejected the request made by the Bahamian liquidators to start litigation in the Bahamas courts over assets held by the US debtors. He also said he would not expect a Bahamian court to follow his orders.
FTX Bankers Consider Selling Stake in AI Company Anthropic
Earlier this week, it was reported that bankers of FTX are looking to offload their stake in AI startup Anthropic.
Perella Weinberg, the boutique bank overseeing FTX’s bankruptcy proceedings, is reportedly discussing the potential sale of Anthropic’s stake with interested parties.
FTX ostensibly owned as much as $500 million worth of shares in Anthropic when it filed for bankruptcy last year. However, courtesy of the recent AI boom and rising demand for AI technologies, Anthropic has experienced significant growth as of late.
Therefore, the sale of the stake is expected to fetch a nine-figure sum, which would be distributed to former FTX customers.
FTX and its group of crypto companies filed for Chapter 11 bankruptcy in early November.
Sam Bankman-Fried, the disgraced founder of FTX, was later arrested in The Bahamas after US prosecutors formally filed criminal charges against him.
He was eventually extradited to the US, where he was released from jail after posting a $250m bond in a New York court. Bankman-Fried is currently awaiting trial, which is scheduled for October.
