U.S. Bankruptcy Judge John Dorsey ruled that FTX can permanently redact names of its individual customers from all bankruptcy-related court documents.
The ruling puts an end to a months-long dispute between the FTX bankruptcy estate and interested external parties, including government lawyers and mainstream media outlets who pushed for access to the list of customer names, according to a June 9 report from Reuters.
Unsealing the list of names would put FTX users at risk of being targeted by scams and could be potentially detrimental to the sale value of the exchange, lawyers for the bankrupt crypto firm argued.
“It is the customers who are the most important issue in this case. We want to make sure that they are protected and they don’t fall victim to any types of scams,” Dorsey said.
The lawyers exploring restructuring opportunities for FTX also believe that keeping the exchange’s customer base confidential will be extremely valuable to potential buyers, according to court documents published on Thursday seen by The Block.
Kevin Cofsky, a partner at Perella Weinberg Partners, said that releasing the names of FTX’s 9 million customers would damage the value that could be recovered for creditors. A rebooted version of the bankrupt crypto exchange also appears to be on the cards, according to April court filings.
Last month, Unchained reported that FTX CEO John Ray III was working with Perella Weinberg Partners on an FTX reboot plan.
In Thursday’s court filings, Cofsky said that FTX’s existing customer base could potentially become creditors that own a portion of the exchange if the reboot plan goes through, and thereby be more incentive to trade on the platform since their fees would go toward a business they partially own.