Mainstream Media Challenges Decision to Protect FTX Customers: Report

Four major media outlets that have advocated for the release of FTX client names have opposed the decision to seal them. Meanwhile, a crypto lawyer told Cointelegraph that there is “clear evidence” of potential harm if the names were disclosed.

June 23 according to Reuters reportsBloomberg, Dow Jones & Company, The New York Times and the Financial Times have appealed Judge Dorsey’s decision to seal the names of FTX clients from the public.

The decision to allow FTX to “permanently redact” the names of individual customers from all court filings was made by Dorsey on June 9 to protect customers, declaring that they were “the most important issue in this matter”. ” Are.

However, legal representatives of the media organizations reportedly challenged this in court on June 22, arguing that FTX is not entitled to a “novel and broad exception” to bankruptcy disclosure requirements because of its “customer use of cryptocurrencies.” We do.”

The media group has appealed against the decision to permanently delete the names of one million FTX customers.

We believe that keeping customer lists a trade secret is important to improving recovery for everyone in bankruptcy reorganization.

Trying to do more harm to people who are already frustrated is unfortunate. pic.twitter.com/0fbpvIE9We

— AFTX 2.0 Alliance (@AFTXcreditor) 23 June 2023

Media outlets hold on to the fact that insolvent companies are generally obligated to disclose the names of their creditors and the amounts owed.

Despite this, Dorsey decided to keep names sealed, saying that he wanted to ensure that customers “do not fall victim to any scams.”

This is in line with an exception to US bankruptcy law that addresses the potential risk of harm from disclosure.

This is not the first time that media outlets have objected to the sealing of the names of FTX customers, having previously filed an objection on May 3.

In an earlier filing, it argued that disclosing the names would not expose creditors to “undue risk”, while also arguing that the list did not qualify as “confidential commercial information”.

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Speaking to Cointelegraph, Dubai-based crypto attorney Irina Heever said she appreciates the wisdom behind Dorsey’s decision “in allowing FTX to keep the names of customers confidential.”

“This appeal to media organizations appears to completely ignore the unique risks individuals face when their identities are exposed,” Heaver said.

“This is not an imaginary concern, there is clear evidence of the harm caused by such disclosures. With 9 million users, the potential for widespread financial and personal damage is enormous.

Heaver pointed to the “Celsius case” as an example, which led to an “increase in phishing attacks” in July 2022.

Celsius depositors received The warning email comes after the company revealed that some customer data was compromised, caused by an internal employee leaking a list of emails to a third-party bad actor.