Major News Organizations Challenge FTX Over Bankruptcy Transparency
Bloomberg, Dow Jones, The New York Times, and Financial Times Object to Cryptocurrency Giant’s Confidentiality Measures
A significant legal clash is underway in the blockchain and crypto world as four renowned news organizations – Bloomberg, Dow Jones & Company, The New York Times, and the Financial Times – take on cryptocurrency giant FTX over confidentiality measures surrounding customer names during bankruptcy proceedings in the United States.
Typically, bankruptcy rules require indebted companies to publicly disclose the identities and amounts owed to creditors. However, Judge John Dorsey made an unusual decision on June 9, granting FTX the permanent ability to obscure the identities of individual customers from all legal filings to protect them from potential scams, a crucial factor in this case according to the judge.
The top media companies objected to this decision on June 22, arguing against FTX’s “unprecedented and extensive exception” to bankruptcy transparency norms. They maintained that the fact that FTX customers deal in cryptocurrency should not exempt the company from normal bankruptcy disclosure procedures.
This objection is not the first time these media outlets have voiced their concerns. They previously lodged an objection on May 3, asserting that disclosing names would not pose an “unjustifiable risk” to creditors and that such a list does not meet the criteria for “secret commercial information.”
In contrast, a cryptocurrency legal expert supported Judge Dorsey’s decision, highlighting tangible evidence of potential harm that could arise from unveiling these names. This aligns with an exception in U.S. bankruptcy law that considers the potential damage caused by such disclosure.
The dispute over whether FTX customer names should be revealed has been an ongoing battle since the beginning of the year.
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