July 21, 2024
Lawyers for Sam Bankman-Fried seek to question FTX's Gary Wang
Latest Cryptocurrency News

FTX Co-Founder Gary Wang Faces Questioning on Legal Counsel in Alameda Loan Saga

Lawyers representing Sam Bankman-Fried are seeking the opportunity to question FTX co-founder Gary Wang regarding his reliance on legal counsel when accepting a series of loans from the connected hedge fund, Alameda Research. This request was made through a legal filing submitted late on Monday night, as Bankman-Fried’s trial enters its second week. The aim is to obtain specific exceptions from the judge, who has previously been hesitant to allow Bankman-Fried to attribute the alleged fraud to his legal advisors.

Prosecutors have previously interrogated Wang regarding loans amounting to approximately $200–300 million that he received from Alameda. He utilized these funds for various venture investments and the purchase of a residence in the Bahamas. The filing argues that Wang’s belief that these were genuine loans, structured by lawyers and documented in formal promissory notes with actual interest payment obligations, is pertinent in countering the notion that these loans were merely a ruse orchestrated by Mr. Bankman-Fried to conceal the origin of the funds.

Wang had previously stated that he did not believe his lawyers would advise him to sign something that was illegal, as mentioned in the filing. The relationship between FTX and its hedge fund division has played a pivotal role in the ongoing criminal case following the collapse of the cryptocurrency exchange in November 2022. The prosecution has asserted that Bankman-Fried misappropriated funds transferred to Alameda, treating them as his personal financial resource.

Wang is anticipated to conclude his testimony later on Tuesday, followed by Caroline Ellison, the former head of Alameda Research and Bankman-Fried’s former girlfriend. Both Wang and Ellison have pleaded guilty and are cooperating with investigators.

Bankman-Fried has entered a plea of not guilty to the fraud charges, with his legal team arguing that the involvement of the company’s legal counsel in the loan agreements suggests that he was unaware of any impropriety. Judge Lewis Kaplan has previously ruled that discussions regarding legal advice received from counsel cannot be presented in the defense’s opening statement, as they may confuse or bias the jury.

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