FTX argues releasing ‘valuable’ customer list will harm its sale value

FTX argues releasing ‘valuable’ customer list will harm its sale value

June 9, 2023

The list of around nine million FTX customers is “extraordinarily valuable” and could harm the crypto exchange’s sale value if released, a member of the FTX restructuring team has argued.

In a court hearing released June 8, Kevin Cofsky, a partner at the investment bank Parella Weinberg on retainer to FTX, said that if competitors were to gain knowledge of FTX’s customers it “would be detrimental” to the exchange’s restructuring efforts.

Cofsky is part of the team aiming to squeeze the maximum amount of value from FTX which could involve a potential sale of the embattled exchange, he said:

“We believe that the existing customer base is extraordinarily valuable and our understanding is based on our research and having looked at the costs incurred by other crypto companies specifically to solicit customers.”

The list of customers is currently under seal, but an objection to the decision was filed by mainstream media outlets, including Bloomberg, the Financial Times, The New York Times, and The Wall Street Journal’s parent firm, Dow Jones & Company.

The media organizations argued the press and public have “a presumptive right of access to bankruptcy filings.”

Related: SEC’s crypto actions surged 183% in 6 months after FTX collapse

According to Cofsky, FTX has begun a “significant” process of soliciting interest from buyers, investors or even a relaunch of the exchange, and the list of customers are “extremely valuable and valued” by those interested in the business.

“I think that releasing that information would impair the debtor’s ability to maximize the value that it currently possesses,” he added.

Cofsky believes that even if the exchange isn’t sold or finds investors, a relaunch of the exchange could see creditors collect a portion of the trading fees on what he dubbed a “first-class” and “regulatorily compliant” FTX.

Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises

Source: Read Full Article