Some mainstream media outlets have objected to attempts to withhold the identities of non-United States customers of cryptocurrency exchange FTX during its bankruptcy proceedings.
In an April 4 filing to a Delaware Bankruptcy Court, media outlets Bloomberg, the Financial Times, The New York Times and The Wall Street Journal parent firm Dow Jones & Company jointly objected to the names of the customers being redacted, arguing that the press and public have “a presumptive right of access to bankruptcy filings.”
While FTX’s debtors are able to argue for the names of creditors to be redacted in bankruptcy filings — and have done so — the media outlets believe that FTX and its customers have failed to “justify such secrecy.”
The Ad Hoc Committee of Non-US Customers of FTX.com claimed in a Dec. 28 filing that publicly revealing the names and private information of non-U.S. customers leaves them vulnerable to identity theft, targeted attacks, and “other injury.”
In the recent filing, the media outlets argued that if the “permanent sealing” of the users were permissible on the grounds claimed by FTX and the ad hoc committee, “then sealing customers’ names would be routine in virtually every bankruptcy proceeding.”
They added that “public access is of the utmost importance here,” as the magnitude of the FTX collapse has “ignited intense public interest in the U.S. legal system’s approach to the burgeoning and largely unregulated cryptocurrency market,” adding:
“The sealing of the names of FTX’s creditors to date has significantly impeded reporting on, and analysis of, these proceedings, leaving the public — and creditors — largely in the dark as to the United States’ enforcement of its bankruptcy laws in the crypto context”
In response to the committee’s Dec. 28 filing, Judge John Dorsey allowed the names and addresses of customers to be redacted for a further three months on Jan. 11, noting that he “remained reluctant at this point” to disclose the confidential information that may put creditors “at risk.”
Crypto lending platform Celsius had similarly tried to ensure that its customers’ names remained redacted during its bankruptcy proceedings but failed to convince the judge, resulting in the personal details of thousands of customers being disclosed on Oct. 5, 2022.
A hearing on the matter is set to occur on April 12 at 1:00 pm Eastern Time.