A managing director for FTI Consulting, a global business advisory firm, has supported a motion from the debtors of the failed crypto exchange, FTX, to withhold “certain confidential information” of its users. The declaration was filed with the U.S. Bankruptcy Court for the District of Delaware on April 20.
According to the managing director, releasing the names of customers associated with the failed crypto exchange could pose “a severe and unusual risk of identity theft, asset theft, personal attack, and further online victimization.” This comes after FTX filed for Chapter 11 bankruptcy on March 18, 2021, following a series of lawsuits against the exchange.
The motion to withhold confidential information was made by the debtors of FTX, including CEO Sam Bankman-Fried and COO Gary Wang. The motion states that the information requested by the plaintiffs, which includes the names of FTX users, their email addresses, and IP addresses, is unnecessary for the resolution of the case.
The debtors argue that the release of this information could cause harm to FTX’s customers, as well as the debtors themselves. They claim that the plaintiffs have not provided any compelling reason for the release of this information and that it would be a violation of FTX’s users’ privacy rights.
FTX is not the first crypto exchange to file for bankruptcy. In 2014, Mt. Gox, once the world’s largest bitcoin exchange, filed for bankruptcy after losing 850,000 bitcoins, worth approximately $450 million at the time. The bankruptcy proceedings for Mt. Gox are still ongoing, with the trustee in charge of the case selling off bitcoins to repay creditors.
The bankruptcy of FTX highlights the risks associated with investing in cryptocurrency. While crypto has gained mainstream acceptance in recent years, it is still a relatively new and unregulated market. Investors should be aware of the risks involved and should only invest what they can afford to lose.
In conclusion, the motion to withhold confidential information of FTX users has been supported by a managing director of FTI Consulting. The debtors of FTX argue that the release of this information could cause harm to FTX’s customers and the debtors themselves. The bankruptcy of FTX highlights the risks associated with investing in cryptocurrency, and investors should be aware of these risks before investing.