FTX advisers Alvarez & Marsal (A&M) sent information on FTX customer trades to at least five field offices of the US Federal Bureau of Investigation (FBI). The information was supplied in response to FBI subpoenas served during court proceedings of the bankrupt crypto firm.

According to an FTX court filing, the FBI’s Philadelphia office asked A&M for information “related to specific IDs” on Amazon Web Services (AWS). The agency’s Oakland and Portland offices asked for customer information and specific transactions in July and August. 

FTX Risked Customer Data

In addition, FTX received subpoenas from the FBI’s Cleveland and Minneapolis establishments. The advisers reportedly billed the FTX bankruptcy estate $21,000 for the FBI requests across July, August, and September.

The FTX subpoenas highlight how users of centralized exchanges surrender anonymity when they sign up. The crypto wallet addresses assigned to customers can easily be linked to their real-world identities if the exchange needs to comply with anti-money laundering regulations.

Exchanges can also create a single point of failure by storing client information in a centralized location like a cloud server. A hack of the cloud provider may endanger customer assets, similar to how a recent breach of LastPass, a password manager holding crypto keys, saw $4.4 million in crypto assets lost.

The FTX advisers will get paid from FTX assets that are in varying stages of liquidation. A court recently allowed FTX debtors to sell crypto assets in weekly tranches of $100 million to minimize market impact.

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Author: David Thomas

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