A coalition of four major media companies have recently put forward an objection to a federal judge’s decision to keep the names of FTX creditors private. The New York Times, Dow Jones, Bloomberg and Financial Times have argued that there was no legal basis for withholding the names of those that are owed money by the failed exchange.
Founded in 2019, FTX aimed to make it easier for customers to purchase, sell and bet on the future price of digital assets. Unfortunately, the company met its end very quickly in November 2020 due to mismanagement of funds, including the co-mingling of customer funds.
Their former CEO, Sam Bankman-Fried, is facing 13 criminal charges such as wire fraud and conspiracy to commit money laundering. Prosecutors also alleged that Bankman-Fried had made 300 illegal political donations in the US in an attempt to purchase influence over cryptocurrency regulations.
The 9.6 million individual customers who are owed money were never disclosed during the bankruptcy case. FTX stated that any public disclosure of creditors’ names would lead to them being exposed to the potential of fraud and theft.
The media companies, however, pushed back against FTX's claim and were subsequently allowed to argue their case in January in front of Judge John Dorsey. The institutional creditors of the top 50 creditors, who are owed a total of $3.1 billion, have expressed their desire to have their names remain private.
The situation is still ongoing as the judge considers the evidence presented in the case. The media companies have stated that FTX has not given sufficient evidence for their protected information requirement and—more importantly—hungry creditors want to know when and where they will be paid back.
It will be difficult for the court to assess the ethical dilemma of whether withholding information on the creditors to protect against potential fraud is worth more than the creditors receiving their payment; the media companies are certainly pushing the judge to give creditors their rightful returns.
Victoria Lopez
- 2023-05-04
Media Companies Demand Disclosure of FTX Creditors
A coalition of four major media companies recently objected to a federal judge’s decision to keep the names of FTX creditors private during its bankruptcy proceedings. The companies argued that there was no legal basis for withholding the names of those that are owed money by the failed exchange.
