FTX claims that disclosing their customer list will decrease their sale value.
A member of the FTX restructuring team has argued that the list of around nine million FTX customers is “extraordinarily valuable” and could harm the crypto exchange’s sale value if released.
Kevin Cofsky, a partner at the investment bank Parella Weinberg on retainer to FTX, said in a court hearing released on June 8th 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.
“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 mainstream media outlets, including Bloomberg, the Financial Times, The New York Times, and The Wall Street Journal’s parent firm, Dow Jones & Company, filed an objection to the decision. They argued that the press and public have “a presumptive right of access to bankruptcy filings.”
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.
Based on Cofsky’s discussions with interested bidders: “Existing customers would be extremely valuable to […] third parties interested in investing in the business.” Also sees value in the list for reorganisation where customers get equity and interest to trade on the exchange.
— FTX 2.0 Coalition (@AFTXcreditor) June 8, 2023
“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.