Sam Bankman-Fried, founder of crypto trading platform FTX, is demanding that insurance companies reimburse attorneys’ fees. This follows a recent lawsuit involving the platform, which ended in a settlement after months of legal battles. Bankman-Fried is now calling on insurance companies to honor their policies and provide coverage for legal expenses, arguing that this is a crucial protection for businesses in the cryptocurrency industry. With the market growing rapidly, and legal challenges becoming more common, many in the crypto space are likely to be watching this situation closely.
Former CEO of FTX, Sam Bankman-Fried, is seeking to use the company’s director and officer liability insurance to help cover his rising legal costs. His legal team argues that he is entitled to use the insurance policy to pay for his legal bills, as the charges against him stem from his time as FTX’s top executive. Bankman-Fried’s insurers, Relm Insurance and Beazley Insurance, have been asked to advance or refund his defense costs and fees under his directors and officers insurance policy. If the court grants his request, Bankman-Fried would have priority over other FTX creditors in receiving any reimbursement from the company. While directors and officers insurance provides protection, it is subject to certain limitations and exclusions, and executives still need to act in good faith and make sound business decisions. Bankman-Fried faces several criminal charges for alleged misconduct and may spend the rest of his life in prison if found guilty. He requests that the court grant the sought relief without notice if no responses or objections are filed by March 29, 2023.