Crypto tycoon Sam Bankman-Fried files lawsuit against insurance provider

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Crypto tycoon Sam Bankman-Fried files lawsuit against insurance provider

The tycoon, Sam Bankman-Fried, has filed a civil suit against his insurance provider, CNA, for failing to pay legal costs related to his defense against fraud allegations.

Bankman-Fried has pleaded not guilty to charges of conspiracy to commit money laundering and money laundering by U.S. prosecutors in a trial that begins Tuesday. The complaint filed against CNA said that he is also involved in a dozen civil and regulatory actions relating to his collapsed crypto exchange FTX.

His CNA policy has a limit of liability of $5 million, kicking in when an underlying $10 million policy is exhausted. Bankman-Fried's case makes it clear that they are facing a significant financial burden of lawsuits since FTX declared bankruptcy in November 2022.

He was originally released on bail on a $250 million bond in December, which was later revealed to be co-signed by his parents and two family friends linked to Stanford University.

Bankman-Fried proposed in a January substack post that he would surrender some $500 million worth of Robinhood shares in exchange for access to FTX's directors and officers insurance policy for executives, though those assets have now beenseized by the Department of Justice.

Bankman-Fried's fraud trial began Tuesday at a Manhattan courthouse, beginning with a process known as voir dire, used to select members of a jury.