FTX Customers Request US Court Not To Reveal Their Names In Public During Bankruptcy Hearing

In a separate case involving the Celsius Network's bankruptcy filing in October, earlier, a US judge had ruled that customer names must be put out in the public domain without their addresses.

Some non-US FTX customers have requested the US bankruptcy court to keep their names confidential during the case hearing. They said that revealing their names and information publicly could expose them to the risks of thefts and scams in the industry. According to a report by Reuters, some FTX customers outside the US, who reportedly owed $1.9 billion, told judge John Dorsey that this particular case was different. The customers also informed the court that disclosing their details could end up hampering FTX's attempts to sell off its business portions. They reminded that these were supposed to be done to make money for the creditors of the company.

They said, "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."

Even the FTX has been requesting the court to keep the details of the customers secret. However, the US Department of Justice's bankruptcy watchdog has expressed opposition to the requests.

Generally, most bankrupt companies put out the identity and related information about the customers, clients, creditors, and amounts of loans in the company among other details, in the public domain.

Customers' data privacy has been an ongoing subject of debate and discussion in matters related to the crypto industry and other bankruptcy filings earlier.  In a previous case, for example, a judge ruled that customer names must be made public without their addresses or email addresses. This happened in the Celsius Network's bankruptcy case in October.

About two years ago, the same bankruptcy judge, Dorsey, allowed the customers to remain anonymous for the crypto lender Cred. During that time, he believed that it was important to do so in order to preserve Cred's ability to "market and sell that list" for any possible sale of the company.

In the current case of FTX's bankruptcy filing, Dorsey will hear the customer privacy-related arguments on January 11, 2023, in Wilmington, Delaware.

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