Media Outlets File Appeal to Reverse Court’s Decision on Redacting FTX User Names

Several prominent media outlets are appealing against a bankruptcy court’s decision to permanently withhold the names of FTX users. The New York Times, Dow Jones & Company, Bloomberg, and the Financial Times recently filed a petition with the US Bankruptcy Court for the District of Delaware, asserting that there is an inherent right for the public to access bankruptcy filings and that concealing the names infringes upon that right.

These media organizations had previously requested the unsealing of the names of FTX creditors in December 2022, but Judge John Dorsey ruled to keep the customer names confidential for three months. In May 2023, when the media companies raised objections to this decision, Judge Dorsey once again favored FTX, prioritizing the safety of the creditors and ordering the permanent redaction of customer names.

Now, the media outlets are making a third attempt to disclose the names of FTX creditors. The firms’ legal representatives argue that FTX should not be exempt from disclosure requirements simply because its customers utilized cryptocurrency.

In his recent ruling, Judge Dorsey justified the non-disclosure by stating that revealing individual customer names could expose them to scams and identity theft. He emphasized the need for FTX to prioritize customer safety and protect them from falling victim to fraudulent activities.

According to the court’s decision, FTX has been temporarily permitted to remove the names of companies and institutional investors from its customer lists. However, if FTX wishes to maintain the redaction, it must request permission again after 90 days.

FTX Pursues Recovery of Funds Transferred by Bankman-Fried to Investment Firms FTX has lodged a complaint in a Wilmington, Delaware, bankruptcy court, seeking the return of $700 million that its founder, Sam Bankman-Fried, transferred to K5 entities in 2022.

FTX alleges that Bankman-Fried acted as a lavish benefactor, sending millions to K5 Global, its affiliates, and K5 Global co-owners Michael Kives and Bryan Baum after attending a social event hosted by Kives in 2022.

The exchange is demanding the funds’ return, claiming that the transfers were made without receiving equivalent value and were avoidable, thus subject to reversal under the Bankruptcy Code or other applicable laws.

Meanwhile, the bankrupt cryptocurrency exchange is confronting mounting legal and advisory expenses. Reports submitted by the exchange’s bankruptcy advisors reveal that they have billed the company an astounding $121.8 million in fees and expenses for the period spanning February 1 to April 30.

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