As Trial Opens, FTX’s Bankman-Fried Battles Excess Insurer Over D&O Coverage

Just two days before his criminal trial started this week in federal court in New York, FTX Trading founder Sam Bankman-Fried filed suit in federal court in California against his excess insurance company seeking payment of legal costs.

The suit filed against CNA unit Continental Casualty Co. claims that the insurer has improperly refused to cover his legal costs under a directors and officers (D&O) excess insurance policy issued to parent company Paper Bird and its subsidiary, FTX.

Bankman-Fried has been charged with defrauding investors out of billions of dollars through his FTX cryptocurrency exchange, which went bankrupt in 2022. Prosecutors say that from 2019 until 2022, he used monies from the exchange’s customers to fund his hedge fund and buy real estate. He also made political donations, according to prosecutors. Bankman-Fried has pleaded not guilty.