Major media outlets, including Bloomberg, Dow Jones & Company, The New York Times, and the Financial Times, have reportedly opposed the decision to seal the names of FTX customers. Legal representatives of these media organizations have argued that FTX is not entitled to a “novel and sweeping exception” to bankruptcy disclosure requirements simply because its customers use cryptocurrency.
United States bankruptcy Judge John Dorsey had previously ruled on June 9 to allow FTX to permanently redact the names of individual customers from all court filings, citing their safety as the most important issue in the case. However, the media outlets have filed an appeal challenging this decision.
According to a Reuters report on June 23, the media organizations’ legal representatives have contended that bankrupt companies are typically obligated to disclose the names and amounts owed to their creditors. They argue that FTX should not be granted special treatment in this regard.
Media Outlets Challenge Decision to Protect FTX Customer Names, Citing Lack of Transparency
Judge Dorsey, however, decided to keep the names sealed, expressing his intention to protect customers from falling victim to scams. This aligns with the exception outlined in U.S. bankruptcy law, which aims to address potential risks of harm associated with disclosure.
This is not the first objection raised by media outlets regarding the sealing of FTX customer names. They previously filed an objection on May 3, arguing that revealing the names would not subject creditors to undue risk and that the list does not qualify as confidential commercial information.
Crypto lawyer Irina Heaver, based in Dubai, commended Judge Dorsey’s ruling, stating that it allows FTX to keep customer names confidential. She emphasized that the appeal by media organizations seems to overlook the unique risks faced by individuals if their identities are revealed. Heaver pointed to the example of the “Celsius case” in July 2022, which resulted in a surge of phishing attacks after customer data was compromised due to internal employee misconduct.
The media outlets challenge to the decision to protect FTX customers’ names highlights the ongoing debate surrounding bankruptcy disclosure requirements and the considerations specific to customers using cryptocurrency. The outcome of this appeal will have implications for the balance between transparency and individual privacy in similar cases.
