During the ongoing trial of the bankrupt FTX exchange, Sam Bankman-Fried (SBF) has attributed the loans issued to FTX co-founder Gary Wang by Alameda Research to the involvement of lawyers. SBF’s legal team has therefore requested Judge Lewis Kaplan to conduct further cross-examination of Wang to determine his knowledge of the lawyers’ involvement. This interrogation would aim to ascertain the specific attorneys involved in the loans and the nature of their participation.
Prosecutors have already questioned Wang about a series of personal loans amounting to approximately $200-$300 million that he received from Alameda Research. These loans were intended to fund venture investments by FTX and his purchase of a house in the Bahamas. It is important to establish Wang’s “understanding” that these were genuine loans in order to counter any claims that they were merely sham loans concocted by SBF to conceal the source of the funds.
Wang stated that he relied on the lawyers and did not believe that the loans were designed to hide the fact that the money was coming from Alameda. He also expressed confidence that the lawyers would not ask him to sign anything illegal.
According to Wang’s testimony, SBF was not surprised to discover a massive $8 billion shortfall in the days leading up to the collapse of FTX. Caroline Ellison, former CEO of Alameda and SBF’s ex-girlfriend, who is cooperating with investigators, is expected to provide further testimony on Tuesday.
Sam Bankman-Fried is currently facing seven counts of conspiracy and fraud related to the collapse of FTX and Alameda Research. Both Gary Wang and Caroline Ellison have pleaded guilty and are cooperating with investigators.