A U.S. judge supervising FTX’s bankruptcy indicated on Friday that he would permit media organizations to intervene in the case so they could argue that the defunct cryptocurrency exchange must make the names of its clients publicly available.
Judge John Dorsey of the U.S. Bankruptcy Court stated that he would permit the New York Times (NYT.N), Dow Jones, Bloomberg, and the Financial Times to participate in the case but postponed arguments over whether or not FTX must reveal customer identities until a hearing on January 11.
The media businesses stated in a Delaware bankruptcy court filing that keeping customer names confidential may cause bankruptcy procedures to become a “farce” if creditors begin squabbling anonymously over how much money they ought to receive.
According to FTX, the customary U.S. bankruptcy practice of publishing the names, addresses, and email addresses of creditors, which includes clients, exposes them to scams and may be in violation of European privacy rules.
According to the business, revealing the identities of up to a million clients would make it simpler for a rival to steal them, diminishing the value of FTX’s platform when it is trying to find purchasers.
The U.S. Trustee, a division of the U.S. Department of Justice, has already objected to FTX’s motion and stated that openness aids in preventing improper activity in bankruptcy cases.
An attorney for a member of the recently created creditors committee informed the court that the group will choose a legal team to represent them next week. FTX attorneys also stated during the hearing that they had made “substantial progress” on retrieving assets.
