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But lawyers for FTX and its official committee of unsecured creditors argued that its customer list is both a valuable asset and confidential commercial information. They contend that secrecy is needed to protect FTX customers from theft and potential scams, and to ensure that potential competitors do not “poach” FTX customers. FTX believes its customer list could prove valuable as part of any sale of assets, or as part of a reorganisation.
“The debtors are in a position to realize value from these customer lists,” said FTX attorney Brian Glueckstein.
FTX entered bankruptcy in November when the global exchange ran out of money after the equivalent of a bank run. Founder Sam Bankman-Fried has pleaded not guilty to charges that he cheated investors and looted customer deposits to make lavish real estate purchases, campaign contributions to politicians, and risky trades at Alameda Research, his cryptocurrency hedge fund trading firm. Three former FTX executives have pleaded guilty to fraud charges and are cooperating with investigators.
In January, Dorsey ruled that FTX could redact the names of all customers, and the addresses and email addresses of non-individual customers, from court filings for 90 days. He also authorised FTX to permanently keep secret the addresses and email addresses of individual creditors and equity holders.
On Friday, the judge approved the permanent sealing of individual customer names and extended the secrecy regarding the names of institutional customers for another 90 days.
Dorsey refused, however, to continue to allow FTX to shield the names of individual creditors or equity holders who are citizens of the United Kingdom or European Union nations and covered under a consumer protection program known as the General Data Protection Regulation, or GDPR. FTX sought similar treatment for individuals covered under Japanese data privacy laws.
Dorsey said that, in response to an objection from the US trustee, FTX had presented no evidence to show that those foreign individuals might be harmed, or that FTX might be sanctioned, if their names are disclosed.
Dorsey also rejected a request by attorneys for an ad hoc committee of non-US customers to keep the names of its members secret. If the committee wants to participate in the case, then the names of its members must be disclosed, he said.
According to redacted court filings, the ad hoc committee currently has 35 members, with estimated economic interests in FTX ranging from US$64,434 to US$1.5 billion. Dorsey noted that some members may decide to drop out based on his ruling.
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