Collapsed exchange FTX's customer list can remain permanently sealed, a judge ruled on June 9, after debate over how the list can return value to investors.
Delaware Judge John Dorsey ruled that the list counts as a trade secret, according to the Associated Press, and keeping the list secret will help protect creditors from harm.
“It’s the customers that are the most important issue here,” the judge said, according to AP. “I want to make sure that they are protected and they don’t fall victim to any types of scams that might be happening out there.”
FTX customers will have their names permanently shielded. This will, however, exclude customers in the UK and those covered under General Data Protection Regulation rules. The judge extended the secrecy around institutional clients for another 90 days.
The value of the customer list
FTX lawyers and supporters had argued that the list would help FTX be more attractive in the event of a sale or investment into the company.
Kevin Cofsky, partner at investment bank Perella Weinberg Partners — which is tasked with exploring restructuring and capital market opportunities for FTX Group — had described the list as "extraordinarily valuable." He added that if the customer list was released then it would damage the value that could be recovered for creditors.
On the other side, the U.S. bankruptcy trustee and media outlets had argued that the customer list should be released, with the latter arguing this would be in the public interest.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.