Crypto tycoon Sam Bankman-Fried has sued his insurance provider, CNA, for allegedly failing to pay legal costs linked to his defense against fraud allegations.
Bankman-Fried has pleaded not guilty to fraud charges levied by U.S. prosecutors in a trial that starts Tuesday. The legal complaint filed against CNA said he is also involved in a dozen civil and regulatory actions relating to his collapsed crypto exchange FTX.
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.”
His CNA policy has a limit of liability of $5 million, kicking in when an underlying $10 million policy is exhausted, the document said. The filing makes clear the mounting financial cost of litigation for Bankman-Fried since FTX declared bankruptcy in November 2022.
After being arrested in December, he was originally released on bail on a $250 million bond, that was eventually revealed to have been co-signed by his parents and two family friends linked to Stanford University.
In a January Substack post, Bankman-Fried suggested he would be willing to surrender some $500 million worth of Robinhood shares in return for access to FTX’s directors and officers (D&O) insurance policy for executives, though those assets have now been confiscated by the Department of Justice.
Bankman-Fried’s fraud trial began Tuesday in a Manhattan courthouse, starting with a process known as voir dire, used to select members of a jury.
CNA did not immediately respond to CoinDesk’s request for comment.