Audio Sources - Full Text Articles

FTX bankruptcy judge allows media companies to argue for revealing customer names


Representations of cryptocurrencies are seen in front of displayed FTX logo and decreasing stock graph in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo/File Photo/File Photo

A U.S. judge overseeing the bankruptcy of FTX said on Friday he would allow media companies to intervene in the case so they could argue the collapsed crypto exchange must publicly disclose the names of its customers.

U.S. Bankruptcy Judge John Dorsey said he would allow the New York Times (NYT.N), Dow Jones, Bloomberg and the Financial Times to intervene in the case but deferred arguments on requiring FTX to disclose customer names to a hearing on Jan. 11.

The media companies argued that keeping customer names secret could turn bankruptcy proceedings into a “farce” if creditors start fighting anonymously over how much money they should receive, the media companies wrote in a Delaware bankruptcy court filing.

FTX has argued that the usual U.S. bankruptcy practice of disclosing names, addresses and email addresses of creditors, which includes customers, could expose them to scams and could violate privacy laws for those who live in Europe.

The company has also said that disclosing identities of as many as 1 million customers would make it easier for a competitor to poach them, undermining the value of FTX’s platform when it is looking for buyers.

The U.S. Trustee, part of the U.S. Department of Justice, has already objected to FTX’s request and argued that transparency helps protect against impropriety in bankruptcy cases.

FTX attorneys also told the hearing they have made “significant progress” on recovering assets and an attorney for a member of the newly formed creditors committee told the court the group will select a legal team to represent them next week.

Friday’s bankruptcy hearing comes at the end of a dramatic week for the crypto exchange. Founder Sam Bankman-Fried was arrested on fraud charges on Monday, FTX CEO John Ray testified before the U.S. Congress on Tuesday, and FTX opposed Bahamas-based liquidators’ demand for access to its systems and records on Wednesday.