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Names of collapsed cryptocurrency FTX customers can remain secret, bankruptcy judge rules

A bankruptcy judge ruled Friday that defunct cryptocurrency exchange FTX can permanently redact the names of its former customers, saying they could be victimized by scammers.

The names of customers who used the since-collapsed cryptocurrency FTX Exchange can remain secret permanently, a bankruptcy judge in Delaware ruled Friday. 

Several media outlets — who had argued there is a "compelling and legitimate interest" in the names — and the U.S. bankruptcy trustee had challenged FTX’s request to keep customers’ names from public view. 

Judge John Dorsey ruled the identities of FTX’s customers are a "trade secret."

"It’s the customers that are the most important issue here," Dorsey said. "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."

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Dorsey said customers could have their personal information stolen by scammers searching the "dark web" if their identities were revealed. 

Brian Glueckstein, who represented FTX, also argued that "the debtors are in a position to realize value from these customer lists," adding that the customer list is a valuable asset to the organization. 

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But Dorsey said that the names of creditors or equity holders from the U.K. and European Union (and covered under a consumer protection program known as the General Data Protection Regulation) can be released, saying there is no evidence they would be harmed by a disclosure. 

Kate Townsend, who represented the media outlets, had argued FTX’s collapse last year, "sent shock waves not just through the cryptocurrency industry, but the entire financial industry. And at this point, we don’t even know where the shock waves, both individually and institutionally, have hit the hardest, and what institutions may have the largest, or no, exposure as a result."

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Dorsey had previously ruled in January that FTX could redact customer information from court filings for 90 days. 

FTX filed for bankruptcy last November and its founder Sam Bankman-Fried has been accused by federal prosecutors of misleading FTX investors and lenders, and stealing billions of dollars in customer funds. 

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He has pleaded not guilty to 13 federal charges and remains on house arrest at his parents' California home on a $250 million bond until his trial, which is slated for October.

Fox Business' Breck Dumas and Landon Mion, and the Associated Press contributed to this report. 

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