FTX Faces Hearing on Whether to Reveal Names of 1 Million Clients

FTX founder Sam Bankman-Fried leaves Manhattan Federal Court.
FTX founder Sam Bankman-Fried leaves Manhattan Federal Court.

Michael M. Santiago / GettyImages

A decision is brewing on whether to reveal disgraced crypto tycoon Sam Bankman-Fried's biggest secret--the names of his roughly 1 million clients.

At a hearing tomorrow, bankruptcy judge John Dorsey will hear arguments from the New York Times, Dow Jones, Bloomberg, and the Financial Times about why clients of Bankman-Fried's now-bankrupt FTX no longer deserve anonymity, part of a broader attempt to shed more light on the failed exchange's inner workings. FTX representatives say the revelations would violate privacy rules and turn the proceedings into a farce.

It's not the only decision on tap: a battle is also brewing on how to handle the sale of the crypto exchange's subsidiaries.

Key Takeaways

  • Media companies will say the collapsed crypto exchange must disclose customer names.
  • FTX says it would violate privacy laws, turn hearings into a farce.
  • The bankrupt crypto exchange failed to disclose financial details about the entities it planned to sell. The matter will also be heard in court tomorrow.

FTX has failed to provide complete financial disclosures regarding the entities it intends to sell, according to Andrew Vara, the U.S. bankruptcy trustee in FTX’s case. The businesses include crypto derivatives exchange and clearinghouse LedgerX, FTX Europe, and custody platform Embed, FTX Japan. Vara says the sale should not be allowed because FTX insiders have been criminally charged, and their counterparts working at subsidiaries should not be overlooked. A hearing on the matter is scheduled for tomorrow.

Separately, crypto lender BlockFi, which received a $400 million lifeline from FTX, will also publish financial information on Wednesday. The crypto company, which had been exposed to FTX, filed for bankruptcy late last year.

Article Sources
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  1. Reuters. "FTX Bankruptcy Judge Allows Media Companies To Argue for Revealing Customer Names."

  2. Kroll. ''FTX Trading Ltd.''

  3. Twitter. "BlockFi Expects...January 11, 2023."

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