1. Home
  2. Irina Heaver

Irina Heaver

Mainstream media challenge decision to protect FTX customers: Report

Legal representatives of the media outlets have reportedly argued that FTX is not entitled to a “novel and sweeping exception” just because its customers used cryptocurrency.

The four major media outlets advocating for the release of FTX customer names have opposed the decision to seal them. Meanwhile, a crypto lawyer told Cointelegraph that “there is clear evidence” of potential harm if the names were to be disclosed.

According to a June 23 Reuters report, Bloomberg, Dow Jones & Company, The New York Times, and the Financial Times have appealed Judge Dorsey’s decision to seal the names of FTX customers from the public.

The decision to allow FTX to "permanently redact" the names of individual customers from all court filings was made by Dorsey on June 9, for the safety of the customers, declaring that they are the "most important issue in this case."

However, legal representatives for the media organizations have reportedly challenged this in a June 22 court filing, arguing that FTX is not entitled to a “novel and sweeping exception” to bankruptcy disclosure requirements simply because its “customers used cryptocurrency.”

The media outlets have stood by the fact that bankrupt companies are usually obligated to disclose the names and amounts owed to their creditors.

Despite this, Dorsey made the decision to keep the names sealed stating that he wants to ensure that customers “don’t fall victim to any scams.”

This is in line with the exception in U.S. bankruptcy law that addresses the potential risk of harm by disclosure.

It is not the first time the media outlets have objected to the names of FTX customers being sealed, having previously filed an objection on May 3.

In the earlier filing it was argued that revealing the names wouldn't subject creditors to "undue risk" as well as contending that the list does not qualify as "confidential commercial information."

Related: FTX seeks to claw $700M from Bankman-Fried friends and affiliated funds

Speaking to Cointelegraph, Dubai-based crypto lawyer Irina Heaver said she applauds the wisdom behind the Dorsey's ruling “in allowing FTX to keep customer names confidential.”

“This appeal by media organizations seems to completely overlook the unique risks faced by the individuals if their identities are revealed” Heaver stated.

“This is not a hypothetical concern, there is clear evidence of the harm that can be caused by such disclosure. With 9 million users, the potential for widespread financial and personal damage is colossal.”

Heaver pointed at the “Celsius case" as an example, which led to “a surge in phishing attacks” in July 2022.

Celsius depositors received a warning email after the company disclosed that certain customer data had been compromised, which occurred due to an internal employee leaking a list of emails to a third-party bad actor.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Strategic Bitcoin Reserve Can Pay Off Over a Third of US National Debt by 2050, According to VanEck Executive

Death and self-custody: How to pass on your crypto when you die

Crypto lawyers suggest including highly detailed instructions in one’s will and appointing a crypto-savvy next-of-kin, among other suggestions.

The average crypto investor probably isn’t planning on dying of old age anytime soon, but that doesn’t mean they shouldn’t have a plan in place to pass on their crypto in the event they meet an unlikely demise, lawyers warn.

Speaking to Cointelegraph, Dubai-based crypto lawyer Irina Heaver believes that “billions” worth of Bitcoin (BTC) has been lost due to a lack of proper death-related planning by hodlers.

She noted that many families have been unable to access their loved one’s crypto assets due to private keys being taken to the grave, and emphasized the importance of discussing crypto assets with family and including them in their will.

Heaver said that the typical crypto investor is a “male millennial” between the ages of 27 to 42, which is the age range where arranging one’s financial affairs in case of death is the “last thing” to come up in conversation.

However, the lawyer believes it is “essential” to confirm that the administrator of one’s will is proficient in using cold and hot wallets in order to properly distribute one’s holdings.

Digital asset lawyer Liam Hennessy, partner at Australian law firm Gadens, believes that crypto investors should know that the “vanilla first step” to safeguarding their families’ future is to prepare a will — but they should also be mindful that crypto is a complicated asset and that the will needs to include really specific instructions on where the crypto is and how the keys are accessed.

Cast your vote now!

Heaver has observed “huge problems” in the process of inheriting crypto, including a case where a family approached her asking for help in accessing a deceased loved one’s crypto assets.

Digital asset lawyer Krish Gosai, managing partner of Gosai law, believes that it is especially important to inform beneficiaries about crypto due to the lack of understanding surrounding digital assets.

Gosai believes it’s important to inform the executor of the will or loved ones about the existence of crypto assets but advised against sharing sensitive login information or seed phrases, saying it isn’t necessary.

He suggested that, if necessary, the seed phrase could be split among four family members.

Tax implications

Inheriting crypto can also be complex due to the differences in tax structures among jurisdictions.

Heaver added that in some jurisdictions, there are inheritance taxes. For example, in the United Kingdom, crypto assets will be “liable” for inheritance tax on the death of the holder and capital gains tax on a valid disposal.

Related: Answering a morbid question: What happens to your Bitcoin when you die?

In Australia, there is no inheritance tax, but Heaver noted that there is a capital gains tax if one disposes of an asset inherited from a deceased estate.

She noted there are then jurisdictions where there are no taxes, like the United Arab Emerites.

Digital asset lawyer Liam Hennessy, partner at Gadens, added that realizing digital assets at the best price can be another complication, due to factors such as price fluctuations and smart execution protocols.

Strategic Bitcoin Reserve Can Pay Off Over a Third of US National Debt by 2050, According to VanEck Executive