Several prominent media organizations, including The New York Times, Dow Jones & Company, Bloomberg, and the Financial Times, have appealed in an attempt to overturn a bankruptcy court’s decision to permanently redact the names of FTX users. The media houses argue that the public has a “presumptive right” to inspect bankruptcy filings, and by keeping the names concealed, that right is effectively denied.
The media companies first sought to have the names of FTX creditors unsealed in December 2022, but Judge John Dorsey ruled to keep the names sealed for three months. In May 2023, when the media companies filed another objection to the redaction decision, Judge Dorsey sided with FTX once again, emphasizing the importance of creditors’ safety and ordering FTX to “permanently redact” its customers’ names.
Now, with a third attempt underway, the lawyers representing the media firms argue that FTX should not have an exception to disclosure requirements solely because its customers use cryptocurrency. Judge Dorsey, however, claims that releasing individual customers’ names could expose them to scams and identity theft. He underlined that customer safety should be prioritized and that they should be protected from any scams.
On the other hand, FTX has been granted temporary permission to remove the names of companies and institutional investors from its customer lists. To continue keeping them redacted, the exchange will need to make another request in 90 days.
Recently, FTX filed a complaint in Wilmington, Delaware, bankruptcy court, seeking the return of the $700 million that its founder Sam Bankman-Fried had transferred to K5 entities in 2022. FTX accused him of being a “profligate patron,” sending millions to K5 Global, affiliated entities, and K5 Global co-owners Michael Kives and Bryan Baum. The transfers were described as being done “without receiving equivalent value” and, more notably, avoidable, meaning they could be reversed under the Bankruptcy Code or other laws.
At the same time, the bankruptcy-ridden crypto exchange faces mounting legal and advisory costs. The exchange’s bankruptcy advisors have submitted filings revealing that they billed the company an astonishing $121.8 million in fees and expenses between February 1 and April 30.
In conclusion, while FTX’s customer safety concerns hold merit, the media houses striving for transparency question the extent to which secrecy is necessary, demonstrating tensions between privacy and public access in the cryptocurrency space.
Source: Cryptonews
