A Delawarean court Judge ruled that FTX creditors’ information remains clandestine according to the company’s policy. This decision was made during the FTX case hearing on Tuesday.
FTX to redact clients’ information for now
John T. Dorsey, a Delawarean Judge presiding over the FTX litigation, has ordered the excision of the firm’s creditors’ data. With this, the addresses and names of these investors will no longer go public—this move correlated with a motion by the company to keep users’ information from public view.
Meanwhile, the US Trustees Office moved a motion against FTX, demanding utmost transparency. The agency is a unit in the Department of Justice vested with oversight functions on insolvency proceedings. Initially, it asked that users’ information be released to clarify the issue.
Hence, it will not disclose information to its investors without their consent. They further asserted that FTX’s clients are the company’s most valuable assets. Therefore, they must be protected from competitors.
Other lawyers’ partners join the fight for customer protection
Seconded by a group of attorneys defending FTX’s unprotected clients, they rebuffed the idea of exposing users’ data. Instead, they based their argument on confidentiality and privacy being the cornerstone of the industry. Besides, rolling out sensitive information as such could mar the possibility of customers’ recovery and demotivated inclusion in the insolvency process.
Judge Dorsey stated that he needed to safeguard the interests of involved Investors. And the courtroom is the only place to do so outside the internet. However, he added that these clients are prone to danger online.
Dorsey further said that hacking often results in sensitive information leaking. However, safeguarding the participants of the bankruptcy process is very crucial. Notably, FTX attorneys were more than just concentrated on FTX account holders.
A lawyer at Sullivan and Cromwell, James Bromley, revealed that FTX keeps getting attacked. The first attack resulted in the drainage of millions of dollars from the firm when it filed for bankruptcy. He noted that there had been attacks on the exchange afterwards.
The court has ordered the exchange to begin remunerating its workers and creditors. On December 16, another hearing will hold at the Delaware court.