Non-US FTX Customers Ask Bankruptcy Court Not to Dox Them

According to a Thursday report, a group of non-US FTX customers asked the court not to reveal their identities. The customers are worried both about their own safety in case they get doxxed and that such a move could complicate the exchange’s bankruptcy proceedings.

FTX Customers Fear Identity Theft if Their Information Gets Revealed

Allegedly, a group of customers of the recently-collapsed cryptocurrency exchange FTX from outside the United States filed a request with bankruptcy Judge John Dorsey not to make their identities public. The group argues that should their information be revealed, they could be in danger of identity theft. 

Additionally, the group believes that doxxing them could be detrimental to the overall bankruptcy proceedings saying that “cryptocurrency holders are particularly susceptible to fraud and theft because cryptocurrency is difficult to trace and there are fewer security safeguards in place to protect the assets”. 

The group is collectively owed $1.9 billion. Judge Dorsey will hear arguments on customer privacy on January 11th at a hearing in Wilmington, Delaware, and has also asked a committee representing all FTX creditors to provide its opinion on the matter.

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What Happens to Customer Information When a Company Goes Bankrupt?

While FTX has itself requested to maintain the privacy of its users, the standard practice when it comes to bankruptcies involves the revealing of customers’ information. In the case of the fallen cryptocurrency exchange, the Department of Justice and several media outlets are opposing FTX’s request for exemption from this part of the procedure.

Earlier this year, customers of the bankrupt crypto lender Celsius Network found themselves in a similar situation. In their case, the court overseeing the matter ruled that the company must reveal the names of its creditors in accordance with standard practice.

Despite the complicated situation, the identities of FTX’s customers remain undisclosed for the time being. Furthermore, there may be some hope that the situation will remain unchanged as the presiding Judge Dorsey previously demonstrated some leniency toward customers of crypto businesses. After Cred was hit by the state of Colorado in 2018 over an ICO and went bankrupt in 2020, Judge Dorsey allowed its customer list to remain secret.

Do you think the identities of FTX’s customers should remain undisclosed? Let us know in the comments below.