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A new petition seeking reimbursement of Sam Bankman-Fried’s legal costs has faced fierce opposition from lawyers representing crypto exchanges and their creditors’ committees.
According to an earlier Cointelegraph report, Bankman-Fried’s attorneys filed a motion on March 15 seeking directors and officers (D&O) insurance to cover his legal costs. payment queue.
Legal costs are covered by most policies (after deductibles), but insurance companies have provisions regarding the choice of lawyers, so even if approved, the insurance company may Suppose) is unlikely to approve a high-paying attorney.
— Mr. Purple (@MrPurple_DJ) March 16, 2023
March 29 Objected filingFTX attorneys objected to Bankman-Fried’s attempts to prioritize his own attorney fees at the expense of other potential claimants, stating:
“It would be unfair, unfair and contrary to the interests of justice to allow Mr. Bankman-Fried to exhaust the D&O policy for his sole benefit.”
FTX’s attorneys argue that if the court rules in Bankman-Fried’s favor, the insurance payment should apply to other directors and officers with claims on the funds.
Official Committees of Unsecured Creditors submitted On the same day, it noted that the D&O insurance policy only applies “when making honest decisions in the ordinary course of business”, arguing “that is not the case” with respect to Bankman-Fried’s request.
The commission argued that the court should deny the request, labeling Bankman-Fried “the alleged perpetrator of one of the greatest criminal frauds of the last decade.”
This sentiment was echoed by some in the cryptocurrency community prior to Sam Bankman-Fried’s request.
Directors and Officers (D&O) liability insurance is a type of insurance that protects individuals against personal losses if they are sued as a result of serving as a director or officer of a company. Such policies may also be used to cover attorneys’ fees and costs incurred as a result of litigation against former officers or directors.
However, the creditors panel argued that Bankman-Fried failed to justify his claim for available $10 million in compensation, which would instead be used to cover FTX’s losses.
Related: SBF banned from using online messengers under new bail deal
According to reports, the former FTX CEO is now paying his legal fees with the $10 million he previously gave his father, Joseph Bankman, after Bankman-Fried loaned him money from Alameda Research.
Bankman-Fried was indicted on 22 February on 12 counts, including a number of fraud charges, and on 28 February on a dozen charges after allegations that he used $40 million to try to bribe Chinese officials. was rounded up to the charges of
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