Bankman-Fried’s Defense Targets $300M Loan Interrogations; Ex-CTO Gary Wang Spotlighted

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Attorneys defending ex-FTX chief Sam Bankman-Fried are keen to interrogate the former CTO of the now-dissolved exchange concerning personal loans ranging from $200-300 million, a fresh letter from Cohen & Gresser LLP reveals. Former CTO Gary Wang is set to return to the stand on Tuesday, with reports suggesting that ex-Alameda Research CEO Caroline Ellison will follow suit.

$300M Loans Under the Microscope in FTX Legal Battle

A letter from the attorneys representing Sam Bankman-Fried seeks permission from the judge to allow certain lines of questioning during the cross-examination of Gary Wang, a witness for the prosecution. The defense wants to question Wang about the involvement of FTX attorneys in structuring and executing personal loans worth $200-300 million that Wang received from Alameda Research to fund investments and purchase property.

The prosecution’s direct examination of Wang already revealed that FTX attorneys were involved with the loans, according to the lawyer Chris Everdell at Cohen & Gresser LLP. The defense argues this line of questioning is relevant to Bankman-Fried’s good faith and lack of criminal intent regarding the money laundering conspiracy charge. The indictment alleges Bankman-Fried took steps to conceal the source of funds for investments as coming from FTX customer funds transferred through Alameda.

Questioning Wang about his understanding that the loans were structured by lawyers, memorialized in notes, and imposed real obligations could rebut the claim the loans were a sham to conceal the source of funds. Wang reportedly told the prosecution he relied on the lawyers regarding the loans and did not think they were designed to be illegal or conceal Alameda as the source of funds.

This corroborates Bankman-Fried’s understanding that the loans were proper. Consequently, the defense seeks the judge’s approval to probe Wang on these subjects during cross-examination. Last week, Wang shared insights with the judge about Alameda’s unique advantages and a whopping $65 billion credit line. He detailed how, in collaboration with developer Nishad Singh, they crafted the “allow negative” function, permitting Alameda to trade without backed credit. After the cross-examination, former Alameda Research CEO Caroline Ellison is slated to testify.

What do you think about the lawyer’s letter to the judge about Wang’s cross-examination? Share your thoughts and opinions about this subject in the comments section below.