Sam Bankman-Fried is asking for money to cover legal costs

The former CEO of FTX is demanding permission for the insurer to pay him the funds necessary for his defense.

Sam Bankman-Fried wants to use FTX's insurance policies to cover his legal costs, according to court records dated March 15 this year. The disgraced entrepreneur's legal counsel requested permission for the insurers to pay an advance or reimburse his client's defense costs under the directors' and officers' liability insurance policies.

Sam Bankman-Fried is asking for money to cover legal costs

The former CEO of the collapsed cryptocurrency derivatives exchange is again demanding funds to ensure a “worthy” defense in the trial. The FTX platform collapsed in November 2022. Bankman-Fried himself was arrested by Bahamian authorities and later extradited to the United States. He was released from prison on a hefty $250 million bail and is currently under house arrest.

The SBF is now awaiting a criminal trial set for October 2, 2023. His legal counsel recently applied to allow insurers to pay an advance on legal costs or reimbursement of defense costs and other related fees under directors' and officers' liability insurance policies. Insurance policies were issued by Relm Insurance and Beazley Insurance.

The policies are rumored to provide “priority payments to individual policyholders with an unsecured loss such as that suffered by Mr. Bankman-Fried in the FTX bankruptcy.” Accordingly, the SBF would be at the top of the payouts.

This directors and officers liability insurance is intended to protect them against personal losses if they are sued as a result of their office. What's more, it covers legal fees and other costs arising from the lawsuit.

An attorney for the former CEO of FTX stressed that Sam Bankman-Fried has faced multiple criminal, regulatory and civil prosecutions. On February 23 this year, four new criminal charges were filed against him. He has been charged with 12 criminal charges in total.