FTX Customers Seek Privacy in Crypto Bankruptcy Case
A group of FTX customers wants their names kept out of the crypto exchange’s bankruptcy case.
The customers said in court papers filed this week that their desire to keep their names and contact information private outweighs the public interest in a transparent bankruptcy proceeding, The Wall Street Journal reported Thursday (Dec. 29).
“It is difficult to imagine a more compelling case that would warrant withholding and redacting the information of the thousands of FTX.com customers who had their funds stolen and never anticipated that their use of cryptocurrency and FTX.com would become publicly known,” the filing said.
The customers argue that they’d be at risk for cyber scams and identity theft if their names became public, and it could cause whatever remaining value FTX has to dwindle.
The news came two days after the filing of a class action suit against FTX and its former executives, aiming to represent 1 million FTX customers who hope to get a declaration that FTX customers in the U.S and other parts of the world are the owners of the digital assets held by FTX and Alameda Research.
And if a judge decides that the assets are FTX property, then the suit wants to get a ruling that the customers should be repaid before other creditors.
“Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda,” the complaint said.
As PYMNTS reported on Nov. 21, FTX has said it owes its 50 largest creditors more than $3 billion. The top 50 claims by the exchange’s creditors range from $21 million on the low end to more than $250 million on the high end.
Companies in the U.S. are required to disclose information about their debts during bankruptcy proceedings. The company’s creditors will have a chance to weigh in on the best way for FTX to allocate its repayment of the outstanding debts as the bankruptcy proceeds.
FTX's bankruptcy — part of a multibillion collapse of the exchange that has turned into a global criminal investigation — came during a year filled with “headlines and breathtaking heists that spotlight how creative bad actors have become,” as PYMMTS wrote recently.
These cases show how scammers have fine-tuned their efforts to "follow the money and take it away from innocent victims — individuals, families, and businesses among them."
And cryptocurrency-related crimes, such as the $372 million hack at FTX that followed the company’s bankruptcy, “are only among the ‘splashiest’ of crimes,” PYMNTs noted.
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