- June 25, 2023
- Posted by: [email protected]
- Category:
Media outlets, including Bloomberg, Dow Jones & Company, The New York Times, and the Financial Times, have reportedly challenged a decision made by United States bankruptcy Judge John Dorsey to seal the names of FTX customers from the public. Legal representatives of these outlets argue that FTX should not be granted a broad exception to bankruptcy disclosure requirements simply because its customers use cryptocurrency.
On June 9, Judge Dorsey ruled in favor of allowing FTX to permanently redact the names of its individual customers from court filings, citing their safety as the paramount concern in the case. However, the media organizations’ legal representatives filed a court document on June 22, contesting this decision and asserting that FTX does not merit such a novel and extensive exception.
The media outlets maintain that bankrupt companies typically disclose the names and amounts owed to their creditors, and they question the rationale behind keeping FTX customer names sealed. Despite these objections, Judge Dorsey upheld his decision, emphasizing the need to protect customers from potential scams, in line with the risk mitigation provisions of U.S. bankruptcy law.
This is not the first time the media outlets have objected to the sealing of FTX customer names. They previously filed an objection on May 3, arguing that revealing the names would not pose undue risk to creditors and that the customer list does not qualify as confidential commercial information.
Crypto lawyer Irina Heaver, based in Dubai, supports Judge Dorsey’s ruling to maintain the confidentiality of FTX customer names. Heaver highlights the potential harm that could be inflicted on individuals if their identities were revealed, citing real evidence of the damage that disclosure can cause. With FTX serving approximately 9 million users, the risks of widespread financial and personal harm are substantial.
Heaver points to the “Celsius case” as an example, which resulted in a surge of phishing attacks in July 2022. After Celsius disclosed that certain customer data had been compromised due to an internal employee leaking a list of emails to a third party, depositors received a warning email.
The appeal by the media organizations, according to Heaver, seems to disregard the unique risks faced by FTX customers if their identities are exposed. She commends Judge Dorsey’s decision, recognizing the potential for significant harm and advocating for the protection of customer privacy.
