- A non-U.S. FTX creditors group forced the bankruptcy court to keep creditors’ sealed.
- $5 billion in cash and cryptocurrency has been recovered.
Judge John Dorsey, who is overseeing FTX’s bankruptcy proceedings, made the decision on January 8th. FTX had filed a request to maintain confidentiality of creditors’ information. A list of names containing nine million FTX creditors will remain sealed for at least three more months.
Amid rising demands from media outlets and lawyers for transparency in court proceedings, Judge Dorsey explained that revealing creditors’ information ‘at this point’ could put them at risk. He added, “I’m going to overrule the objection and allow lists of creditors to remain sealed at this point,” and mentioned that he would inspect the issue after 3 months. “We are talking about individuals here who are not present-individuals who may be at risk if their name and information are disclosed.”.
FTX lawyers based their filing on the argument “that disclosure of the information would create an undue risk of identity theft or unlawful injury to the individual or the individual’s property” and that the court should use its “broad discretion” under the US bankruptcy code in order to protect the victims of the FTX collapse.
Last December, a non-U.S. FTX creditors’ group forced the court to keep creditors’ information sealed, arguing in a December 28 joinder filing that making the information public would cause “irreparable harm.”
FTX attorney Brian Glueckstein of Sullivan & Cormwell, told the court that he wanted to “redact sensitive personal information of customers and other stakeholders” and “protect the value in the debtors customer list as an asset,” ensuring that it can be potentially sold at the later stage of proceedings.
However, Judge Dorsey’s decision runs contrary to many bankruptcy proceedings where information about creditors was disclosed, in October 2022, when a similar incident happened in Celsius’ bankruptcy proceedings.
FTX’s investors might not be as lucky as the creditors. As per a document released on January 9th, the court revealed the number of shares held by investors and that they expect losses.
Among those included NFL legend Tom Brady, FTX former brand ambassador Gisele Bundchen, his ex-wife, tech entrepreneur Peter Thiel, and Shark Tank investor Kevin O’Leary.
As per the first bankruptcy filings, FTX reported over 1 million and that $3 billion is due to the top 50 creditors (in terms of investment) alone.