Judge John Dorsey has ruled in a Delaware court that ordinary FTX customers can remain anonymous indefinitely. The decision could set a precedent for customer anonymity in other insolvencies. Even so, many face a long wait to retrieve their lost funds from the collapsed exchange. And, when assessing the ruling’s impact, it is well to remember that no two bankruptcies are exactly the same.
As reported by Fox Business and other sources, a conglomerate of media organizations argued there was a “compelling and legitimate interest” in the names. A US bankruptcy trustee backed this request. However, over the weekend, Judge Dorsey ruled the identities of FTX’s customers are a “trade secret.” Dorsey reasoned that revealing the names would open up the former customers to identity theft and other crimes.
US Customers Will Stay Anonymous
In January, Dorsey issued a ruling granting FTX the authority to redact customer information from court filings for a period of 90 days. “It’s the customers that are the most important issue here,” Judge Dorsey said. “I want to make sure that they are protected and they don’t fall victim to any types of scams that might be happening out there.”
Brian Glueckstein, a lawyer representing FTX, argued that “the debtors are in a position to realize value from these customer lists.”
The decision is a win for privacy for FTX customers who have already lost billions in digital assets locked up in the exchange when it went bust. In March, the now-defunct platform said it had identified $8.9 billion in missing customer funds. However, in January, lawyers for the company said they had discovered $5 billion that was previously missing.
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Author: Josh Adams
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