By Dietrich Knauth
(Reuters) – A gaggle of FTX clients from exterior the US have requested a U.S. chapter decide to maintain their names secret in the course of the cryptocurrency change’s chapter case, saying that revealing their identities might expose them to identification theft and different scams.
Bankrupt corporations usually reveal the names and quantities of debt held by their collectors, together with particular person clients.
However in a late Wednesday evening courtroom submitting, a gaggle of non-U.S. FTX clients who say they’re owed $1.9 billion advised U.S. Chapter Choose John Dorsey that this case is totally different.
Additionally they warned that disclosure might undermine FTX’s efforts to promote elements of its enterprise, which it desires to do to earn more money accessible for collectors.
“Cryptocurrency holders are notably prone to fraud and theft as a result of cryptocurrency is tough to hint and there are fewer safety safeguards in place to guard the belongings,” the group wrote.
FTX, as soon as led by Sam Bankman-Fried, can also be searching for an exception that might maintain its clients’ names secret.
That request has been opposed by the U.S. Division of Justice’s chapter watchdog, in addition to numerous media together with the New York Occasions and Wall Road Journal.
Buyer privateness has been a difficulty in different crypto-related bankruptcies.
In October, for instance, the decide overseeing Celsius Community’s chapter dominated that buyer names have to be revealed, however their addresses and e-mail addresses may very well be stored secret.
Two years in the past, Dorsey let the shopper listing of crypto lender Cred stay secret, to protect Cred’s potential to “market and promote that listing” as a part of a attainable sale of the corporate.
Dorsey will hear arguments on buyer privateness at a Jan. 11 listening to in Wilmington, Delaware. He has requested a committee representing all FTX collectors to weigh in.
Attorneys for the official FTX collectors committee didn’t instantly reply to a request for touch upon Thursday.
(Reporting by Dietrich Knauth; Enhancing by David Gregorio)
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