A judge today agreed to allow media organizations to intervene in the FTX case and argue to have creditors names revealed.
Judge John Dorsey, who is overseeing the case, said at a court hearing Friday that he would allow the New York Times, Dow Jones, Bloomberg, and the Financial Times to make their cases heard in January.
At the previous bankruptcy hearing on November 22, Judge Dorsey said he wanted to keep the names and addresses of the top 50 creditors redacted for now to protect their identities—but last week the four news organizations filed a suit asking for the names to be revealed.
The top creditors are owed an estimated $3.1 billion following the collapse of the crypto exchange—described by counsel to FTX’s new management James Bromley as “one of the most abrupt and difficult collapses in the history of corporate America.”
FTX argues that publishing creditors’ names could reveal private information—such as email or physical addresses.
Once one of the most popular digital asset exchanges, FTX went bust last month. The company was so badly managed its staff used consumer-level apps Slack and QuickBooks to handle the multibillion dollar behemoth’s finances, according to new CEO John Ray III.
Ray, an experienced insolvency lawyer who’s dealt with some of the biggest bankruptcies in history, including the collapse of the energy giant Enron, said during his testimony before Congress earlier this week that the company’s collapse was caused by “a very small group of grossly inexperienced and unsophisticated individuals.”
He also alleged that the company commingled customers’ crypto investments with its sister trading firm Alameda Research—also founded by Bankman-Fried.
The arrangement between FTX and Alameda ultimately wasn’t feasible, however, and when financial documents leaked and customers got a whiff of how bad the books were, they tried to take out their holdings, leading to a bank run and the eventual collapse of the exchange.
FTX lawyers told Friday’s hearing they had made “significant progress locating assets” that went missing following the crash. At least $8 billion dollars-worth of assets are missing following the collapse of the exchange.
Bankman-Fried, who wooed politicians and made huge donations to Democrats and Republicans, gave a series of bizarre interviews following the collapse of the exchange but was arrested Monday evening in the Bahamas by local cops at the request of U.S. authorities.
The Complex Frauds and Cybercrime Unit at the Southern District of New York US Attorney’s Office hit him with eight charges, including conspiracy to commit wire fraud on customers, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate the campaign finance laws.