According to reports, legal counsel for the media organizations argued that FTX is not entitled to a “novel and sweeping exception” simply because some of its clients utilize cryptocurrencies.
The choice to seal the identity of FTX customers in the ongoing bankruptcy case concerning the cryptocurrency exchange has caused criticism. The news organizations Bloomberg, Dow Jones & Company, The New York Times, and the Financial Times have expressed their disapproval of the sealing of customer names and have appealed Judge John Dorsey’s ruling.
Prior to prioritizing their safety, Judge Dorsey had earlier decided on June 9th that the names of specific FTX clients should be permanently removed from court documents. The judge voiced worry about possible frauds that victims of the customers’ names might fall prey to.
The media companies counter that FTX shouldn’t be given a broad exemption from bankruptcy disclosure laws just because some of their clients utilize cryptocurrencies. They assert that FTX should follow the general rule that requires bankrupt corporations to disclose the names and amounts owed to their creditors.
It is not a fresh trend that the media outlets oppose to the consumer identities being sealed. They had earlier submitted a protest on May 3rd, voicing their objections to the lack of openness and the significance of disclosure in bankruptcy cases.
A cryptocurrency attorney has chimed in on the legal dispute, highlighting the possible harm that could result from disclosing the identities of FTX buyers. They contend that there is convincing evidence that their protection is necessary.
The decision to seal the names of FTX customers and the outcome of the appeal will have an impact on how the bankruptcy processes are transparent and disclosed, as well as the ongoing discussion surrounding privacy and cryptocurrency-related problems.