Sam Bankman-Fried, the former Chief Executive Officer (CEO) of FTX has requested access to the insurance policy of the company to finance his defense.
The FTX insurance policy is worth around $10 million and would still require that the insurance providers Relm Insurance and Beazley Insurance approve it before Bankman-Fried receives it. Markedly, if he is eventually convicted for the crimes that he is being charged with, Bankman-Fried will be expected to pay back the funds.
The Bahamian-headquartered cryptocurrency exchange curated the insurance policy fund to protect its directors and officers in cases of a lawsuit. As the CEO of the company before its implosion, SBF is entitled to get the insurance policy. However, the peculiarity of the lawsuits against the young billionaire including the misappropriation of customers’ deposits and defrauding investors may be a disadvantage to SBF.
Therefore, the bankruptcy judge is still in the middle of deciding if the former FTX CEO is fit to receive the insurance policy. On his part, Bankman-Fried is trying to get the judge to lift a stay in his favor. Once this is done, Relm Insurance and Beazley Insurance would be cajoled into evaluating his eligibility for the insurance policy in correlation with the terms of the policy.
Bankman-Fried Yet to be Proven Guilty
Unlike Caroline Ellison and Gary Wang who pleaded guilty to the charges levied against them, SBF pleaded not guilty instead.
Noteworthy, he has not been proven guilty so far by any court to the charges which include misappropriation of customers’ funds, alleged money laundering charge, and breaking US campaign laws, amongst other charges. In accordance, his legal representatives have requested that he should be regarded as not guilty to any crime and therefore, allowed access to the insurance policy.
Matthew Gold, a partner at the law firm representing the young billionaire Kleinberg, Kaplan, Wolff & Cohen said “It’s completely right to say that he hasn’t been found guilty of anything yet, but the scope of the fraud and what he’s been accused of is certainly far from ordinary.”
Amidst the ongoing bankruptcy proceeding, the new CEO of FTX John Ray III released a 45-page document that details the slapdash record-keeping method employed by the crypto exchange before its implosion as well as other financial control failures.
