As the case involving Sam Bankman-Fried (SBF) and his
cryptocurrency exchange FTX enters its second week, his legal team has sought
permission from Judge Lewis Kaplan to cross-examine Gary Wang, the Co-Founder of
FTX, about the legal advice he received regarding loans obtained from Alameda
Research.
In a letter addressed to Judge Kaplan yesterday (Monday), prosecutors
have already questioned Wang about the substantial loans he allegedly received
from the hedge fund, which he used for venture investments and to buy a house in the
Bahamas. SBF’s defense argues that Wang believed these loans were legitimate
and had been structured by lawyers. This perspective aims to challenge the idea
that these loans were intended to conceal the source of the funds.
In part, the letter read: “On direct examination, the
Government questioned Wang about a series of personal loans worth approximately
$200-$300 million that he received from Alameda Research to fund venture investments by
FTX and to fund his purchase of a house in the Bahamas.”
The relationship between FTX and Alameda
Research is central to the ongoing criminal case. Prosecutors argued that SBF
used funds transferred to Alameda Research as his financial resources. However, SBF
maintains his innocence, with his legal team emphasizing that the participation
of the company’s lawyers in the loan arrangements suggests that he might not
have been aware that this was inappropriate.
Prosecutors in the trial have alleged that FTX engaged in
deceptive practices, funneling customers’ funds directly into a bank account
controlled by Alameda Research. This move allegedly misled customers about the whereabouts and usage
of their funds, creating a complex web of deception. Unlike regular FTX
customers, Alameda Research enjoyed extraordinary privileges, including
maintaining a negative balance
