KEY POINTS
- Alvarez & Marshal started investigating FTX customers’ accounts and transactions in July
- The FTX advisor moved forward with the extraction of customer information related to their transactions in August
- The FBI’s Philadelphia office sent a grand jury subpoena to FTX advisors to “investigate activity related to specific individuals”
FTX financial advisors from Alvarez & Marshal have surrendered customer data and transaction records, among others, to law enforcement agencies, court records show.
The billing records of Alvarez & Marshal, the financial advisor involved in the bankruptcy proceedings of the now-bankrupt crypto derivatives exchange FTX, revealed that it has provided the data because of the subpoenas issued by the FBI offices in Portland, Oakland, Cleveland, Philadelphia and Minneapolis.
Alvarez & Marshal started investigating FTX customers’ accounts and transactions in July following the crypto derivatives exchange’s spectacular collapse in November 2022 and began extracting customer information related to their transactions in August.
In September, the financial advisors collected data associated with specific device IDs, which required them to use FTX’s Amazon cloud service – which stores private keys of the exchange – to gain access to the data.
The same month, the FBI’s Philadelphia office sent a grand jury subpoena to “investigate activity related to specific individuals.”
Aside from that, a court filing dated Oct. 31 revealed two requests from FBI offices – one of them associated with the subpoena from FBI Oakland looking for information on transactional data, while the other was from the FBI Philadelphia office requesting “transactional data from AWS related to specific device IDs.”
The reason behind the FBI probes is still unclear. FTX has worked hard to ensure that its customers’ names are hidden from the public.
In June, it received permission to remove the names of its customers from court filings. It argued that if the names become public, it could put customers at risk, especially from scams and identity theft. The ruling from U.S. Bankruptcy Judge John Dorsey came after he signed off on keeping FTX customers’ names secret for three months.
One of the reasons why the cryptocurrency industry attracts a lot of attention from investors is its anonymous nature, but considering the FTX advisors’ disclosures, it looks like privacy and anonymity are not at all guaranteed, particularly in centralized crypto exchange platforms like Sam Bankman-Fried’s FTX.
The latest development came following the conviction of Bankman-Fried on all seven criminal fraud charges filed against him by the U.S. Department of Justice. The crypto mogul, who co-founded FTX and the controversial crypto hedge fund Alameda Trading, is awaiting his sentencing, which is scheduled for March 2024.
