Lawyers of Sam Bankman-Fried are seeking permission to question Gary Wang, the co-founder of the FTX crypto exchange, in the ongoing trial of the disgraced crypto mogul.
Specifically, the attorneys want to know whether legal advice had played a role in the loans that Wang had accepted from the sister fund of the collapsed crypto exchange, Alameda Research.
On October 9th, the defense filed the said request and it comes as the second week of the trial begins and after previous restrictions about Bankman-Fried blaming his lawyers for the fraud.
Federal prosecutors have already put Wang on the stand during the trial and inquired about the loans worth $200 million to $300 million that had been given to him by Alameda Research.
These funds were used by the co-founder to purchase a house in the Bahamas and for a number of other venture investments.
The filing said that the direct examination of the government had already revealed that FTX lawyers had been present and had been involved in the structuring of the loans and their execution.
It also said that Bankman-Fried had also been aware of the lawyer’s involvement. Therefore, the defense wishes to cross-examine Wang to assess his knowledge about the involvement of the lawyers.
The defense is interested in knowing exactly which lawyers were present and how involved they were in the process of the loans.
They are also interested in learning the precise terms of the loans that were issued to Wang, along with any concerns that the co-founder may have had at the time of signing on the loans.
The legal counsel representing Bankman-Fried further said that they may also produce promissory notes documenting the loans that had been given to the co-founder.
The filing also cited FBI 302 reports that are used by the government for memorializing an interview and said that Wang had told the government that he had relied on the attorneys.
In fact, Wang had also said that he did not believe the loans were trying to hide the fact that Alameda was giving the money and he had not believed that the lawyers would ask him to sign something illegal.
Bankman-Fried has been accused of trying to hide the source of the funds, but his legal counsel said that Wang’s assumption that they were actual loans would prove otherwise.
This would be evident from the fact that lawyers had structured the said loans and they had formal promissory notes with real interest payment obligations.
Wang and Bankman-Fried had co-founded the FTX crypto exchange, as they had been high school friends.
But, the former had maintained a low profile, while the latter had been the public face of the exchange during its peak.
Wang pled guilty to charges of securities fraud, wire fraud, money laundering, and campaign finance violations, and former CEO of Alameda Research, Caroline Ellison has done the same.
Meanwhile, Bankman-Fried has denied the charges. Wang’s testimony will end this week and will be followed by that of Caroline Ellison.