Names of 9M FTX Creditors to Remain Sealed for At Least Three More Months
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Names of 9M FTX Creditors to Remain Sealed for At Least Three More Months

At a Wednesday hearing, Judge Martin Glenn announced he will allow the names of FTX’s creditors to remain sealed for the time being.
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At a hearing on Wednesday, January 11th, Judge John Dorsey ruled that the names of up to 9 million FTX creditors are to remain sealed and undisclosed for at least three months. The judge also indicated that he might change his decision at a later date.

Names of FTX Creditors to Remain Undisclosed for Now

At a hearing concerning the bankruptcy of the cryptocurrency exchange FTX held this Wednesday, Judge John Dorsey ruled that the names of the company’s creditors are to remain sealed. According to the ruling, the court believes that disclosing creditors’ names could endanger both them as individuals, and FTX’s restructuring efforts.

Judge Dorsey, however, also stated he would review the issue again in three months. Since FTX went bankrupt, both the US government and certain media outlets have been pushing for creditor names to be disclosed. Such a move would be in accordance with standard bankruptcy procedures and in line with the precedent set when the bankrupt cryptocurrency lender Celsius was compelled to reveal the identities of its creditors.

Over the previous months, several requests to go against the usual procedure and keep creditors’ names undisclosed have been made. In a filing from November 19th, FTX argued that the unsealing of such information could reduce company value and make its post-bankruptcy efforts more complicated. Furthermore, the filing argued that any unsealed creditor lists could be imprecise due to poor record-keeping practices under Sam Bankman-Fried’s leadership.

More recently, a group of non-US FTX customers filed their own request asking the court not to disclose their identities. The group, collectively owed nearly $2 billion, argued they would be in serious danger of identity theft if their names became public knowledge.

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FTX Says It Recovered $5 Billion of its Liquid Assets

At the same hearing on Wednesday, FTX revealed it had recovered around $ 5 billion worth of its assets. According to Adam Landis, a lawyer representing the company, these are the firm’s liquid funds and don’t contain any of its “illiquid” cryptocurrency assets. The attorney also added that FTX’s holdings are so large that selling them would adversely affect the overall market.

FTX’s new management has been facing multiple issues when it comes to asset recovery. The problems have been caused by several factors including the aforementioned poor record-keeping practices which have reportedly made locating the funds very difficult. Allegedly, the matter is so complicated that FTX hired forensic investigators to help in the search in early December.

Asset recovery has also been hampered by adverse events and actions both preceding the bankruptcy and occurring after it was announced. Caroline Ellison, the CEO of FTX’s sister-company Alameda Research, recently revealed to the court that her firm enabled and hid large loans to FTX executives. Furthermore, the crypto exchange became a target of a hack that drained it of hundreds of millions of dollars immediately after it filed for chapter 11 protection.

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Do you think Judge Dorsey will uphold Wednesday’s ruling in three months? Let us know in the comments below.