Some mainstream media outlets objected to attempts to conceal the identities of non-U.S. clients of cryptocurrency exchange FTX in its bankruptcy proceedings.
In a filing in Delaware bankruptcy court on April 4, Dow Jones & Company, the parent company of Bloomberg, the Financial Times, the New York Times and the Wall Street Journal, jointly opposed the redacting of client names, arguing that the media and the public had "a chance to get bankruptcy." Deemed right to apply". While FTX’s debtors were able to argue for the deletion of creditors’ names in the bankruptcy filing and have done so, the outlet argued that FTX and its clients failed to “justify this secrecy.”
FTX.com’s Ad Hoc Committee on Non-U.S. Clients claimed in a Dec. 28 filing that public disclosure of the names and private information of non-U.S. clients would leave them vulnerable to identity theft, targeted attacks, and “other harm.” In the recent filing, the media outlet argued that if "permanent blocking" of users was allowed on the grounds stated by FTX and the ad hoc committee, "then blocking clients' names would become routine in virtually all bankruptcy proceedings."
"Public access is critical here," they added, as the severity of the FTX debacle "has sparked intense public interest in the U.S. legal system's approach to the nascent and largely unregulated cryptocurrency market," adding : “To date, the sealing of the names of FTX creditors has significantly hindered reporting and analysis of these proceedings, leaving the public and creditors largely in the dark about the United States’ enforcement of its bankruptcy laws in a cryptographic environment.”
In response to the committee's Dec. 28 filing, Judge John Dorsey allowed the client's name and address to be redacted for an additional three months on Jan. 11, noting that he "remains unwilling at this time to "Disclosing confidential information that could be leaked puts creditors "at risk." Cryptocurrency lending platform Celsius similarly attempted to ensure that its clients’ names remained anonymized during its bankruptcy proceedings, but failed to convince a judge, resulting in the personal details of thousands of clients being revealed on October 5, 2022. A hearing on the matter is scheduled for April 12 at 1 p.m. ET.
