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Media giant appeals to overturn court decision to keep FTX username
The four media giants continued their efforts to unblock the names of FTX's nearly 9 million users following typical disclosure requirements.
A group of media companies filed an appeal on June 23 seeking to overturn a bankruptcy court decision to permanently delete the names of FTX users. Publishing giants include Dow Jones & Company, Bloomberg, The New York Times, and the Financial Times.
Continuing question
FTX filed for bankruptcy in November 2022. Since then, FTX lawyers and users have advocated keeping the list of FTX’s nearly 9 million creditors confidential. Creditors argued that disclosing the names of FTX clients would expose them to fraud and identity theft.
It is worth noting that in a typical bankruptcy proceeding, the list of creditors is generally made public, as was the case in the Celsius bankruptcy. Therefore, in December 2022, the four major media giants filed a motion to unblock the names.
However, in January, Bankruptcy Court Judge John Dorsey sided with FTX lawyers and ruled that client names be sealed for three months.
In May 2023, the media again challenged the editorial decision. They argue that the public has a "presumptive right" to inspect FTX's bankruptcy filing. Like others, these companies pointed out that FTX creditors could become victims of scams or fraud. However, that's not reason enough to anonymize because "nearly every party in a bankruptcy proceeding can file anonymously."
Despite media objections, Judge Dorsey again ruled in FTX's favor on June 9. The judge put creditors’ safety first and ordered FTX to “permanently delete” the names of its clients. The judge also ordered that the names of the companies and institutional investors be temporarily sealed.
His ruling complied with an exception to bankruptcy law that takes into account the risk of damage from disclosure.
Third Attempt
In a recent filing, the news organization is attempting to reveal the names of FTX creditors for the third time. Lawyers representing the companies argued that FTX does not enjoy a “novel and sweeping exception” to disclosure requirements simply because its customers have used cryptocurrencies.