FTX Advisers Disclose Customer Data to FBI
Court documents reveal that advisers for bankrupt crypto exchange FTX have provided the Federal Bureau of Investigation (FBI) with data from customers’ transactions and accounts. Subpoenas issued by various FBI field offices prompted FTX consultants to hand over records of specific customers’ trades on the defunct exchange. The billing records from Alvarez and Marsal, the financial advisers for FTX, disclosed the FBI’s requests. Although the nature of the investigation and target remain unknown, one record mentions a grand jury subpoena. The consultancy shared transaction data in response to subpoenas from the FBI’s Philadelphia, Oakland, and Portland offices.
FTX Customers to Bear the Cost
FTX customers will ultimately be responsible for covering the cost of the advisers’ work. Invoices for FBI-related services submitted by two advisers in July, August, and September totaled over $21,000. Since November 2022, Alvarez and Marsal have charged nearly $100 million in fees from FTX. However, these fees will be deducted from recoveries for FTX customers.
Proposed Settlement Offers Hope
Newly appointed CEO John J. Ray III has revealed that FTX customers may receive more than 90% of their assets by the end of 2024 due to a proposed settlement between FTX creditors and debtors. This settlement could provide some relief to customers who have suffered losses as a result of FTX’s bankruptcy.
Hot Take: Customers Concerned About Privacy
The revelation that advisers for bankrupt crypto exchange FTX have been disclosing customer data to the FBI raises concerns about privacy and security within the cryptocurrency industry. While it remains unclear why the FBI requested this information or who they were targeting, customers may question the extent to which their personal and financial information is protected on cryptocurrency platforms. As the industry continues to grow, regulators and exchanges must prioritize the security and privacy of their users to maintain trust and confidence in cryptocurrencies.
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