The decision comes after a Jan. 8 filing by FTX’s attorneys, who argued that public disclosure could create an undue risk of identity theft or unlawful injury to FTX creditors.
The names of up to 9,000,000 FTX customers are set to remain confidential for at least three additional months following the latest ruling in FTX bankruptcy procedures.
The decision was reportedly made in the Delaware-based bankruptcy court. Jan.11, because of a 168-page filing by FTX on Jan. 8, which mentioned the court to keep confidential customer information.
Judge Dorsey said that he remains “hesitant at this point” to unveil the confidential information, as it might put creditors “at risk,” regardless of expanded tension from a few media outlets:
“The individuals who are not present are at risk if their name and information is disclosed.”
Days earlier, FTX legal advisors argued “that disclosure of the information would create an undue risk of identity theft or unlawful injury to the individual or the singular’s property” and that the court ought to utilize its “wide attentiveness” under the U.S. Bankruptcy Code to safeguard those impacted by FTX’s collapse.
In late December, a group of non-U.S. FTX customers also pushed the Delaware bankruptcy court to keep customer information hidden, contending in a Dec. 28, The public disclosure would causeirreparable harm.
Judge Dorsey’s decision in all actuality does however negate most bankruptcy procedures where creditor information is unveiled — which is what occurred in cryptocurrency lender Celsius’ bankruptcy procedures in October.
The Delaware-based bankruptcy court hasn’t been as kind to FTX value holders, having delivered a Jan. 9 report that revealed the investors expected to be cleared out and the quantity of shares they held with FTX.
Among those included NFL legend and former FTX brand ambassador Tom Brady, his ex Gisele Bündchen, tech entrepreneur Peter Thiel and Shark Tank investor Kevin O’Leary.
Apparently progress is being made however, with FTX reported to have already recovered $5 billion in cash and cryptocurrency, FTX attorney Andy Dietderich said in a Jan. 11 statement.
According to early bankruptcy filings in November, more than 1 million creditors were speculated to be involved, with $3 billion being owed to the 50 biggest creditors alone.
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