Thread by @nikhileshde

Nearly 550 people in the Zoom call for the first day hearing for FTX's bankruptcy already. Expect some tweets here for @CoinDesk. Not sure how many in the courtroom. Participants were told to attend IRL #FTXbankruptcy

@CoinDesk The Judge said he would grant relief to a motion to seal -- think this means keeping the list of top 50 creditors under seal at the moment #FTXbankruptcy

Proposed co-counsel Adam Landis for FTX says "almost everything" raised by US trustee has been "consensually resolved in connection with first day motions" #FTXbankruptcy

Sullivan Cromwell attorney whose name I missed starts off saying what an "unprecedented matter" this case is, noting the week between filing of the case and the first hearing #FTXbankruptcy

John Ray III, new CEO of FTX, is in the courtroom, Sullivan Cromwell attorney says.

"Unfortunately the FTX debtors were not particularly well-run and that is an understatement," attorney says #FTXbankruptcy

Debtors have "assembled a team of investigators," including former CFTC enforcement director, former AUSA, CFTC enforcement folks and @chainalysis, attorney says #FTXbankruptcy

@chainalysis "The crypto crisis that we're facing in the United States and around the world is well-documented, but the FTX situation is both the latest and the largest failure in the space," the attorney says #FTXbankruptcy

@chainalysis Attorney says there was a run on the bank in the beginning of November + "a leadership crisis." Adds there was "resignation throughout the ranks" as former CEO @SBF_FTX's "leadership frayed" #FTXbankruptcy

The attorney is now recapping the first day filings (see here: coindesk.com/policy/2022/11…) #FTXbankruptcy

We're up to nearly 700 people 20 minutes into this

The US DOJ, SDNY Cyber Crimes Unit have opened a criminal investigation. SEC/CFTC have been in contact, the attorney says #FTXbankruptcy

"We have received requests I would say -- some might say demands -- from the US Congress, both from the Senate and the House to have Mr. Ray appear during the month of December," the attorney says #FTXbankruptcy

Attorney says he wouldn't normally quote Twitter but "there was a quote that I think summarizes this quite well, which is that what appears to be taking place is a serious investigation by serious adults, and we would say we would agree." #FTXbankruptcy

"There are other things on Twitter you wouldn't agree with" jokes the judge.

"That's for sure," says attorney #FTXbankruptcy

Here's the organizational chart FTX is using for the bankruptcy process, that Sullivan and Cromwell is presenting to the court right now #FTXbankruptcy

This is FTX's timeline (note: Gary here is Gary Wang, his co-founder at Alameda) #FTXbankruptcy

History of FTX's investments and valuations from Sullivan Cromwell's presentation #FTXbankruptcy

"There were substantial amounts of money spent on things that were not related to the business," attorney says. One of the US debtors spent around $300 million on real estate in the Bahamas -- namely "homes and vacation properties" #FTXbankruptcy

"Your Honor, what we have is a worldwide organization, but an organization that was run effectively as a personal fiefdom of Sam Bankman-Fried," says Sullivan Cromwell attorney #FTXbankruptcy

"On Nov 2 documents leaked online showing that the FTT token position in the Alameda balance sheet was substantially larger than most anticipated," Sullivan Cromwell attorney James Bromley says, referring to @IanAllison123's @CoinDesk report #FTXbankruptcy coindesk.com/business/2022/…

@IanAllison123 @CoinDesk Bromley is now walking through the collapse of FTX, noting @cz_binance's tweet on liquidating FTT holdings, @carolinecapital's claim that balance sheet was incomplete, and FTX pausing of customer withdrawals #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Bromley shows this chart to detail $FTT's collapse #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "How many employees remain at the company?" judge asks

"That's a good question," you can hear in the background

"Roughly 260" I think Bromley says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Another attorney, whose name i also missed, is now up. Says there are 102 debtors, is walking through FTX's motion to have a consolidated creditor list #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital FTX still wants to redact "confidential customer information" including names and addresses of all core customers, names/addresses/email addresses of non-customer creditors and anything covered under GDPR, attorney says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital FTX attorney now saying customer list numbers "in the millions" (previous ranges were 100,000-1,000,000) #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Sullivan Cromwell attorney for FTX also arguing that FTX's customer list is an asset for the company that could hold a lot of value

Also adds there are "significant privacy concerns" #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital [Ed Note: Every crypto exchange or co that files for bankruptcy is probably going to have to go through this exact same process; we last heard this argument during Celsius's bankruptcy]

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "There is minimal benefit, in our opinion, to requiring immediate mass disclosure of the customers that debtors customer and individual creditor personal information," attorney says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Court and US trustee's office will have access to unredacted information, attorney says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital A representative for the US Trustee's office says they object to redacting names of creditors and customers who are not individuals #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Trustee also objects to a line about authorizing "claims noticing agent to withhold publication of proofs of claims filed by debtors' customers" as "not entirely sure what that means," adds creditors should tell their stories #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "We're also concerned that presently the top 50 [creditors] list contains no information identifying who the creditors are," US Trustee says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "We do object to the names of individuals being redacted. We take no position about individuals' addresses" but object to names of non-EU citizens being redacted, US Trustee says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "What we're trying to protect against ... is to ensure that nobody's personal information was being involuntarily disclosed," FTX's Sullivan Cromwell attorney says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital SuCr attorney says he doesn't believe the top 50 list should be unredacted #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Another attorney who represents an ad hoc group of accountholders has taken the podium: "I think both confidentiality and privacy are engaged here," cites concern of cyber attack #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "There's certainly a pull and tug here between the right to privacy and and the right to everybody involved," judge says #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital "On an interim basis ... allowing the redaction of the names and addresses of the top 50 list. The same goes for the consolidated creditor list," the judge says. "I need to make sure I'm protecting the interests of these individuals" #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital We have an attorney for the FTX Digital Markets joint provisional liquidators now up: "We've worked out everything except for the automatic stay" #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital Bahamas-based liquidators' concern is making sure assets aren't dissipated and information unaccessed, lawyer says on working with US-based lawyers on the whole jurisdictional thing #FTXbankruptcy

@IanAllison123 @CoinDesk @cz_binance @carolinecapital we are taking a 10 minute recess #FTXbankruptcy

Now a bunch of people are talking on the zoom

And we're back, looking at a cash management motion #FTXbankruptcy

Evolve Bank is concerned about how cash management proposal addresses FTX accounts with Evolve, which are FBO accounts meaning it's the bank's property, says an attorney for Evolve #FTXbankruptcy

Evolve has given FTX language that would keep two accounts frozen

"We want to avoid a situation where have these accounts which belong to the bank, it's in fiat currency, it's used for credit cards of our customers," the attorney says #FTXbankruptcy

Philadelphia Indemnity Insurance Company has a limited objection; PIIC has certain custodial funds for FTX it sounds like #FTXbankruptcy

Judge okays an interim order where debtors (FTX) won't close certain accounts #FTXbankruptcy

Another attorney on paying "pre-petition claims of certain critical domestic vendors" --

Asks for interim cap of $8.5 million, foreign vendor interim cap of $1 million, $200,000 for 503B claimants; capital lease payments at $125,000

US Trustee has no objection

#FTXbankruptcy

Attorney says they're seeking limited relief on employee wages; no payment to SBF, Gary Wang, Nishad Singh or Caroline Ellison; otherwise continue paying pre-petition wages and salary to employees #FTXbankruptcy

Second day hearing on Jan 11, 2023 at 10:00 a.m. ET; Trustee has concern about items being sealed, little confusion about whether a mid-December hearing can address some of these concerns #FTXbankruptcy

Okay so it sounds like we'll have some kind of evidentiary hearing on Dec. 16, 2022 at 10:00 a.m. ET; objections due by Dec. 9, replies due Dec. 14 #FTXbankruptcy

And the hearing is over. Someone (the same guy playing music earlier) unmuted himself and tried asking a question but was cut off mid-sentence

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