A U.S. bankruptcy judge overseeing FTX said on Friday he would allow media companies to intervene within the case in order that they may argue that a failed cryptocurrency exchange must publicly disclose the names of its clients.
U.S. bankruptcy judge John Dorsey said he would allow the Recent York Times, Dow Jones, Bloomberg and the Financial Times to intervene within the case, but put aside arguments to require FTX to disclose customer names to a January 11 hearing.
Media firms have argued that keeping client names secret could turn bankruptcy proceedings right into a “farce” if creditors start fighting anonymously over how much money they need to receive, media firms wrote in a Delaware bankruptcy filing.
![FTX founder Sam Bankman-Fried was arrested this week.](https://nypost.com/wp-content/uploads/sites/2/2022/12/bankman-fried-ftx.jpg?w=1024)
FTX says the same old US bankruptcy practice of exposing the names, addresses and email addresses of creditors, including customers, could make them vulnerable to fraud and violate privacy laws for people living in Europe.
The corporate also stated that disclosing the identities of as many as 1 million customers would make it easier for a competitor to acquire them, undermining the worth of the FTX platform when it seeks buyers.
The US Trustee, a part of the Department of Justice, has already opposed FTX’s request and argued that transparency helps protect against misconduct in bankruptcy cases.
FTX’s attorneys also said on the hearing that they’d made “significant progress” in recovering the assets, and an attorney for a member of the newly formed creditors’ committee told the court that the group would choose a legal team to represent them next week.
Friday’s bankruptcy hearing ends a dramatic week for the cryptocurrency exchange. Founder Sam Bankman-Fried was arrested on fraud charges on Monday, FTX CEO John Ray testified before Congress on Tuesday, and FTX opposed requests from Bahamian liquidators for access to its systems and records on Wednesday.