Judge in FTX bankruptcy rejects media challenge, says customer names can remain secret

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A Delaware bankruptcy judge has ruled that the names of individual customers of FTX Trading, a collapsed cryptocurrency exchange, can remain confidential, rejecting a challenge from media outlets and the U.S. bankruptcy trustee. Judge John Dorsey determined that customer identities are trade secrets and that protecting FTX customers from potential harm outweighs the public’s interest in knowing their names.

During the hearing, attorneys representing the media outlets argued that there was a significant public interest in revealing the names of those affected by FTX’s collapse, which sent shockwaves through the cryptocurrency and financial industries. They emphasized the need for transparency to understand the extent of the impact and potential exposure of institutions.

However, FTX and its committee of unsecured creditors contended that the customer list is both a valuable asset and confidential commercial information. They asserted that maintaining secrecy is necessary to safeguard customers from theft, scams, and poaching by competitors. FTX also believes that the customer list could hold value in potential asset sales or reorganization efforts.

The judge acknowledged the concerns raised by both parties but ultimately prioritized protecting FTX customers. Dorsey expressed his desire to ensure they are shielded from scams and malicious actors who may exploit their personal information obtained from the internet or the “dark web.”

In a previous ruling, Dorsey allowed FTX to redact customer names and certain details from court filings for a temporary period. Now, he has approved the permanent sealing of individual customer names and extended the confidentiality of institutional customer names for an additional 90 days.

However, the judge denied FTX’s request to shield the names of individual creditors or equity holders covered by the General Data Protection Regulation (GDPR) in the United Kingdom and European Union, as well as those protected under Japanese data privacy laws. Dorsey noted that FTX provided no evidence of potential harm or sanctions that could arise from disclosing their names.

Additionally, the judge dismissed a request from attorneys representing an ad hoc committee of non-U.S. customers to keep their members’ names confidential. Dorsey stated that if the committee wishes to participate in the case, it must disclose its members’ names.

The ruling acknowledges the existence of an ad hoc committee with 35 members, whose economic interests in FTX range from $64,434 to $1.5 billion. However, Dorsey acknowledged that some members may reconsider their involvement based on his decision.

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More about confidentiality of customer names

• Delaware bankruptcy judge rules on confidentiality of customer names in FTX case
• Media outlets challenge FTX’s request to keep customer names secret
• FTX argues customer list as valuable asset and confidential information
• Founder of FTX pleads not guilty to charges of cheating investors
• Judge’s previous ruling on redaction of customer names and details