Sam Bankman-Fried Sues His Insurer as Legal Bills Mount – Crypto mogul Sam Bankman-Fried has taken legal action against CNA, his insurance provider, alleging that they haven’t covered his legal expenses connected to his defense against fraud accusations. Bankman-Fried, who maintains his innocence in the face of fraud charges brought by U.S. prosecutors in a trial, also faces numerous civil and regulatory proceedings related to the downfall of his cryptocurrency exchange, FTX, as stated in the lawsuit against CNA.
CNA, also known as the Continental Casualty Company, has “unjustifiably failed to make timely payment on Mr. Bankman-Fried’s claims as required by the Policy,” said the filing, adding that those alleged breaches “have caused, and threaten to cause, substantial and irreparable harm to Mr. Bankman-Fried for which there is no adequate remedy at law.”
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According to the legal document, Sam Bankman-Fried’s CNA insurance policy has a liability limit of $5 million, which comes into effect after an underlying $10 million policy has been exhausted. This detail underscores the significant financial burden of the legal proceedings that Bankman-Fried has been facing since FTX filed for bankruptcy in November 2022.
Following his arrest in December, he was initially released on bail with a bond worth $250 million, which was later revealed to have been co-signed by his parents and two family friends associated with Stanford University. In a Substack post published in January, Bankman-Fried hinted at his willingness to surrender approximately $500 million worth of Robinhood shares.
In exchange for access to FTX’s directors and officers (D&O) insurance policy designed for executives. However, it’s worth noting that these assets have since been seized by the Department of Justice. Bankman-Fried’s fraud trial commenced on Tuesday in a Manhattan courthouse, beginning with the jury selection process known as voir dire. This trial marks a significant legal milestone in the ongoing legal challenges he faces.