FTX bankruptcy advisors share customer data with FBI

Recently revealed court records show that Alvarez & Marsal, financial advisors involved in the bankruptcy proceedings of FTX, have shared customer data, including transaction records, with law enforcement agencies amid ongoing investigations.

Billing records from Alvarez & Marsal, the appointed bankruptcy advisors, indicate that they provided this data in response to subpoenas from at least five Federal Bureau of Investigation (FBI) field offices across the United States, including Oakland, Portland, Philadelphia, Cleveland, and Minneapolis.

The information disclosed to law enforcement included details obtained from specific customer transactions, account investigations, and data from cloud computing.

The court documents reveal that some of the data obtained in September is associated with specific device IDs. To access this data, the advisors utilized FTX’s Amazon cloud service, where the exchange had stored its private keys.

Alvarez & Marsal also conducted investigations into customer accounts and transactions in July, as well as the extraction of transaction-related customer information in August.

While it is confirmed that customer data was shared, the exact extent of the information provided remains undisclosed. Nevertheless, the bankruptcy court has taken measures to protect the identities of FTX’s customers following the Chapter 11 filing. This action was taken to safeguard customers from potential risks like hacking, phishing, and other related scams.

Despite concerns surrounding the data sharing, it underscores FTX’s cooperation with law enforcement agencies. The newly appointed CEO of FTX, John J. Ray III, has reportedly been cooperating with law enforcement agencies since he took over.

This development comes in the wake of the recent conviction of former FTX CEO Sam Bankman-Fried in a New York court on Nov. 2. Bankman-Fried was found guilty of all seven charges, and his sentencing is scheduled for March 2024, with the possibility of a lengthy prison term.