Since the catastrophic explosion of the FTX group in November 2022, we have 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 his (very) expensive legal fees to be taken from the reserves – already deeply in deficit – of the fallen crypto-exchange.
Contrary to Sam Bankman-Fried's claims , both FTX.COM (international) and FTX.US (US) have abysmal deficits . While the customers of the cursed crypto-exchange see their chance of seeing a good part of their cryptos dwindling day by day, SBF has just filed a cheeky request which is likely to annoy more than one.
In a court document filed on March 15, 2023 with the Delaware Bankruptcy Court, we learn that Sam Bankman-Fried wants his defense costs to be reimbursed by the insurance policy for FTX executives and directors.
MILLIONS OF DOLLARS FOR SBF'S LAWYERS FIRST, ITS CLIENTS WILL COME LATER
It must be said that John Ray (new CEO of FTX) and the liquidators of the group had previously refused outright to SBF this assumption 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, consistent with the wording of the [insurance] policies, which (1) gives priority of payment to individual policyholders who have suffered uncompensated losses such as 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 by March 29, 2023. Otherwise, SBF will receive funds from FTX's insurance policies – held with Relm Insurance and Beazley Insurance . For his defense expenses already spent , and future ones .
And those costs run into the millions of dollars . Especially with 4 new charges against him since late February, as Sam Bankman-Fried now faces a total of 12 criminal charges . Given that, among them, is fraud against its FTX clients, it is difficult to see how a judge can morally accept that SBF still come to trim its legal costs on the remaining liquidities of its defunct crypto-exchange. Already poor users will probably recover only 10-35% of their investments on FTX, according to recent estimates.