Dow Jones, Bloomberg, New York Times and Financial Times, on Jun 23, filed an appeal against decision to keep FTX creditor names sealed in bankruptcy battle.
In November 2022, FTX filed for bankruptcy protection. Since then, the court gave permission to hide names and addresses of nearly 9 million customers – creditors, revealing only the 50 largest creditors with nearly $3.1 billion. FTX’s lawyers argued that disclosing the client’s identities would put them in danger and vulnerable to threats.
It is worth noting that in typical bankruptcy proceedings, the list of creditors is often made public, taking the case of Celsius for example. So in December 2022, four media giants (Dow Jones, Bloomberg, New York Times and Financial Times) filed a request to release details of all FTX creditors. This appeal was rejected by the court for the first time in January this year. At that time, judge John Dorsey ruled to maintain the confidentiality of individual customer identities for 3 months.
By May 2023, the media still did not give up their intention and continued to oppose the decision. They emphasized that the public had a right to the full disclosure of FTX’s bankruptcy filing. FTX’s security expert warned that this might expose them to scammers. Once their names are known, bad actors can use that to discover other personal information about their targets.
Despite objections from news outlets, the court once again ruled in favor of FTX on June 9. The judge also ordered the temporary sealing of the names of the companies and institutional investors. According to many sources, 4 news agencies are still trying to uncover the identity of FTX creditors for the third time.
Since taking over, FTX attorneys said that the crypto exchange has recovered over $7.3 billion in cash and liquid crypto assets, including cryptocurrencies with extremely low liquidity. FTX is still in the process of recouping billions from institutions such as $460 million from the Modulo Capital, $4 billion from Genesis – a crypto lender that went bankrupt in January 2022; 700 million USD from K5 Global. In the opposite direction, BlockFi is asking FTX to pay them $1 billion.
FTX also spent over $120 million on advisory fees in the first three months of 2023 as bankruptcy proceedings continue.