Why Bankrupt FTX Wants to Keep its List of Customers Private

The dispute over whether or not to reveal the names of customers at collapsed crypto exchange FTX continues. 

At a Thursday hearing, Kevin Cofsky—partner at investment bank Perella Weinberg Partners—said that releasing the names of the customers would hurt the sales process of the shuttered exchange, which is attempting to recover and sell assets to repay creditors.

Perella Weinberg has been tasked with beginning the sale process of FTX, which quickly and unexpectedly went bankrupt in November. 

“My belief is that disclosure of the names, regardless of who disclosed them, would degrade value,” Cofsky said at the hearing in Wilmington, Delaware. 

He argued that disclosing the names of the customers would “impair the debtors’ ability to maximize the value that it currently possesses.”

FTX has previously argued that publishing creditors’ names could reveal private information and compromise their security. However, major media outlets including The New York Times, Dow Jones, Bloomberg, and the Financial Times have argued that the names of the people owed money by FTX should be revealed. 

Institutional creditors were revealed in court documents in January and included the likes of Apple, Netflix, and Coinbase. But the 9.6 million individual customers owed money by the failed exchange have not been revealed. 

The top 50 FTX creditors are owed an estimated $3.1 billion, and have repeatedly told the court that they want their names kept secret. 

FTX went bankrupt last year in a highly-publicized collapse. The exchange was criminally mismanaged, prosecutors allege, and its co-founder and CEO Sam Bankman-Fried was arrested in December.

The disgraced crypto mogul—also known as SBF—was initially charged with eight financial crimes by the Complex Frauds and Cybercrime Unit in the Southern District of New York.

He pleaded not guilty in January, but was hit with further charges in February; he now faces 13—including conspiracy to commit wire fraud, and conspiracy to defraud the United States and violate campaign finance laws.