Media giants appeal to overturn court decision to keep FTX user names redacted
Four media giants continue to fight to unseal the names of FTX's nearly 9 million users in accordance with typical disclosure requirements.
A cohort of media houses filed an appeal on June 23 to overturn a bankruptcy court’s decision to redact the names of FTX users permanently. The publishing giants include Dow Jones & Company, Bloomberg, The New York Times, and the Financial Times.
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. The creditors argue that disclosing the names of FTX customers would expose them to the threat of scams and identity theft.
It is worth noting that in typical bankruptcy proceedings, the list of creditors is generally made public, like in the Celsius bankruptcy case. So, in December 2022, the four media giants filed a motion to have the names unsealed.
However, in January, bankruptcy court judge John Dorsey sided with FTX lawyers and ruled to keep the customer names sealed for three months.
In May 2023, the media houses again filed an objection to the redaction decision. They argued that the public has a “presumptive right” to inspect the FTX bankruptcy filings. Like everyone else, the firms noted that FTX creditors might fall prey to scams or frauds. However, that’s not enough reason to keep the names concealed because “virtually every individual party to a bankruptcy proceeding could litigate anonymously.”
Despite the objections of the media houses, Judge Dorsey again ruled in favor of FTX on June 9. The judge prioritized creditors’ safety and ordered FTX to “permanently redact” the names of its customers. The judge also asked the names of companies and institutional investors to be kept temporarily sealed.
His ruling was in accordance with the exception of the bankruptcy law, which considers the risk of harm by disclosure.
With the recent filing, the news organizations are attempting to have the names of FTX creditors disclosed for the third time. The lawyers representing the firms argue that FTX is not entitled to the “novel and sweeping exception” to the disclosure requirements simply because its customers used cryptocurrency.