Several major media outlets have filed an appeal aimed at overturning the bankruptcy court’s decision to permanently modify the names of FTX users.
In a recent filing in the US Bankruptcy Court for the District of Delaware, The New York Times, Dow Jones & Company, Bloomberg and the Financial Times argued that the public has a “presumptive right” to inspect and maintain bankruptcy filings. Is. Name hiding effectively denies that right.
The media houses had previously filed a motion to unseal the names of FTX creditors in December 2022, but bankruptcy court judge John Dorsey ruled the clients’ names unsealed for three months.
When the media companies again filed an objection to the cutoff decision in May 2023, Judge Dorsey once again sided with FTX, prioritizing the protection of creditors, and ordered FTX to “permanently modify” the names of its customers. ordered.
Now, the media house is making a third attempt to disclose the names of FTX creditors, with lawyers representing the firms arguing that FTX is not entitled to an exception to the disclosure requirements because its clients use cryptocurrencies.
In his latest ruling, Judge Dorsey claimed that publishing the names of individual customers could put them at risk of scam and identity theft.
Dorsey explained that FTX should prioritize customer safety and ensure they do not become victims of scams.
“The customer is the most important issue in this matter,” he said. “We want to make sure that they stay safe and that they don’t fall prey to any kind of scam.”
The court also allowed FTX to temporarily remove the names of corporate and institutional investors from its client list. If the exchange wants to keep them revised, it will have to make another request in 90 days.
FTX seeks to recover funds transferred to investment firms by Bankman-Fried
Last week, FTX filed a complaint in Wilmington, Delaware, bankruptcy court, seeking back $700 million transferred to K5 Entities in 2022 by its founder Sam Bankman-Fried.
The exchange claimed that Bankman-Fried was a “wasteful patron” who defrauded K5 Global as well as affiliated entities and K5 Global co-owners Michael Kives and Brian Baum after attending a social event hosted by Kives in 2022. Had sent lakhs of rupees.
FTX has sought a refund of the funds, and has called the transfers “without receiving equivalent value” and, more importantly, avoidable, meaning they could be reversed under the Bankruptcy Code or other laws.
Meanwhile, the bankrupt crypto exchange is facing rising legal and advisory costs.
According to a filing submitted by bankruptcy advisors to the exchange, the advisors have billed the company a staggering $121.8 million in fees and expenses for the period between February 1 and April 30.