According to FTX, customers’ identities may be compromised if it were made public.
Judge John Dorsey disregarded all of the plaintiffs’ claims.
As part of its continuing bankruptcy procedures, the now-defunct FTX exchange was granted permanent anonymity for its users by a Federal Court in a historic judgement.
The Associated Press reported that the verdict came after a two-day hearing in which the media and the United States Bankruptcy Trustee argued against FTX’s request to keep the identities of its customers and creditors secret.
Also, This ruling is a major step forward for consumer protection in the realm of privacy, money, and cryptocurrencies in the case of future insolvencies.
Strong Media Opposition
Once a major participant in the cryptocurrency industry, FTX declared bankruptcy last year due to financial issues. The bankruptcy filings filed by the exchange included safeguards to prevent the disclosure of consumer information. According to FTX, customers’ identities may be compromised if their names were made public.
Moreover, some news organizations argued at the time that the public’s right to access bankruptcy filings and information should take precedence. Even over any concerns about the safety of the public’s financial information. The media sites further stress that the publication of customers’ names in bankruptcy court procedures is not normally prohibited by international legislation.
The media organizations also contend that the need for privacy is not a good enough reason to withhold information. Reports in the media have argued that this would create a dangerous precedent. Requiring people’s private information to be sealed whenever they want anonymity.
Moreover, Judge John Dorsey disregarded all of the plaintiffs’ claims. And emphasized the trade secret nature of customers’ names in his latest judgement. He said that FTX customers must be protected from identity thieves. Notably, who scour the internet and the “dark web” for sensitive data. While the court sided with FTX, it brings forward the issue of how open or private crypto transactions should be.