FTX Clients Seek Privacy in Crypto Bankruptcy

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A group of FTX clients want their names kept out of the crypto exchange bankruptcy case.

The clients said in court documents filed this week that their desire to keep their names and contact details private outweighs the public interest in transparent bankruptcy proceedings, The Wall Street Journal reported Thursday, Dec. 29.

It’s hard to imagine a more compelling case that would justify withholding and deleting the information of the thousands of FTX.com customers who had their funds stolen and never intended their use of cryptocurrency and FTX.com would become publicly known, according to the filing. .

Customers say they would be at risk of cyber scams and identity theft if their names became public, and it could lead to a decrease in the remaining value of FTX.

The news came two days after a class action lawsuit was filed against FTX and its former executives, seeking to represent 1 million FTX customers who are hoping to get a statement that FTX customers in the United States and other parts of the world are the owners of the digital assets held by FTX and Alameda Research.

And if a judge decides the assets are FTX’s property, then the suit wants to get a ruling that customers should be paid before other creditors.

Client Class members should not have to line up with general secured or unsecured creditors in these bankruptcy proceedings just to share in the diminished real estate assets of FTX Group and Alameda, according to the complaint.

As PYMNTS reported on Nov. 21, FTX said it owed more than $3 billion to its 50 largest creditors. The exchange’s top 50 creditor claims range from $21 million at the low end to more than $250 million at the high end.

Companies in the United States are required to disclose information about their debts during bankruptcy proceedings. The company’s creditors will have the opportunity to weigh in on how best for FTX to allocate its repayment of unpaid debts as the bankruptcy progresses.

The FTX bankruptcy, part of a multi-billion dollar exchange meltdown that turned into a global criminal investigation, came in a year filled with headlines and cutting-edge heists. the blast that shed light on just how bad creative actors have become, as PYMMTS recently wrote.

These cases show how scammers have honed their efforts to “track the money and take it out of the 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 just among the most splashy crimes, PYMNT noted.

For all PYMNTS cryptocurrency coverage, subscribe to the Daily Crypto Newsletter.

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