FTX bankruptcy: SBF puts the reimbursement of its legal costs before that of its customers

SBF completely without embarrassment – Since the catastrophic explosion of the group FTX in November 2022, we learned a lot about the dark side of Sam Bankman-Fried (SBF). His latest request is not likely to make him more popular with his aggrieved customers, quite the contrary. The ex-CEO of FTX wants its (very) expensive legal fees are taken from the reserves – already deeply in deficit – of the fallen crypto-exchange.


Sam Bankman-Fried wants FTX users to pay for his defense

Contrary to the assertions of Sam Bankman-Friedas well FTX.COM (international) that FTX.US (USA) present abyssal deficits. As customers of the cursed crypto exchange see their chance to see a good chunk of their cryptos back diminish day by day, SBF has just filed a cheeky request that could irritate more than one.

In a document court filed on March 15, 2023 with the Delaware Bankruptcy Court, we learn that Sam Bankman-Fried wants his defense costs be reimbursed by the insurance policy for FTX executives and leaders.

Sam Bankman-Fried wants his legal costs paid by FTX insurance.
Excerpt from SBF’s request to have its legal fees reimbursed to FTX’s insurers. – Source: restructuring.ra.kroll.com/FTX

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Millions of dollars for SBF’s lawyers first, its clients will come later

I have to say that John Ray (new CEO to take over FTX) and the liquidators of the group had previously denied clean and clear to SBF this payment of its legal costs. Hence the request of the latter to the court, now.

“Mr. Bankman-Fried asked counsel for the liquidators to lift the stay, in accordance with the wording of the policies [d’assurance], which (1) gives payment priority to individual policyholders with uncompensated losses like Mr. Bankman-Fried, and (2) waives objections to the requested waiver. The liquidators refused, which made this request necessary. »

Responses or objections to this application must be filed before March 29 2023. Otherwise, SBF will receive funds from FTX’s insurance policies – held with Relm Insurance and of Beazley Insurance. For his defense costs already spentand the future.

And these costs are counted in millions of dollars. Especially with 4 new counts against him since late February, as Sam Bankman-Fried now faces a total of 12 criminal charges. Since among them is fraud against customers of FTX, it is hard to see how a judge can morally accept that SBF come crop again his legal costs out of the remaining cash from his defunct crypto exchange. Already that the poor users will likely only recover 10-35% of their investments on FTX, according to recent estimates.

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