FTX judge allows media companies to appeal for revealing customer names
A U.S. judge overseeing the bankruptcy of FTX said on Friday that he would allow media companies to make their case that the collapsed crypto exchange must publicly disclose the names of its customers. U.S. Bankruptcy Judge John Dorsey in Delaware said the New York Times, Dow Jones, Bloomberg, and the Financial Times could present their arguments on requiring FTX to disclose customer names at a hearing on Jan. 11.
The media companies argued in a court filing that keeping the names of as many as 1 million customers secret could turn bankruptcy proceedings into a “farce” if creditors start fighting anonymously over how much money they should receive.
FTX has argued the U.S. bankruptcy practice of disclosing details about creditors, which includes customers, could expose them to scams, violate privacy laws and allow rivals to poach them, undermining its value as it hunts for buyers.
An FTX logo and a representation of cryptocurrencies are seen through broken glass in this illustration taken December 13, 2022. REUTERS/Dado Ruvic/Illustration
FTX said on Friday it planned to sell its LedgerX, Embed, FTX Japan, and FTX Europe businesses during its bankruptcy case. The four companies are relatively independent of the broader FTX group, and each has its own segregated customer accounts and separate management teams, according to an FTX court filing.
FTX is not committed to selling any companies but has already received dozens of unsolicited offers. FTX expects to generate additional bids by scheduling auctions in February and March.
Other bankrupt crypto companies, like crypto lenders Voyager Digital and Celsius Network, have struggled to auction their assets. Voyager had planned to sell its assets to FTX before FTX’s implosion, and Celsius said in a Thursday court filing that it had postponed an auction of its business to improve the bids it had received.
FTX attorneys also said at Friday’s hearing they have made “significant progress” on recovering assets and are working to resolve a dispute with Bahamian securities regulators and attorneys overseeing the liquidation of the Bahamas-based FTX Digital Markets.
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An attorney for the Bahamas-based liquidators, Jason Zakia, said FTX had prevented the Bahamas bankruptcy from moving forward by cutting off access to data and casting “aspersions” on the actions of the Bahamas government. Dorsey will address the data access dispute on Jan. 6 if the two sides do not reach a deal.
Friday’s bankruptcy hearing comes at the end of a dramatic week for the crypto exchange. Founder Sam Bankman-Fried was arrested on fraud charges on Monday, FTX CEO John Ray testified before the U.S. Congress on Tuesday, and FTX opposed Bahamas-based liquidators’ demand for access to its systems and records on Wednesday.
