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- Sam Bankman-Fried’s lawyers want to rely on FTX co-founder’s testimony to refute money laundering allegations.
- Gary Wang testified last Thursday that FTX attorneys were involved in the structuring and execution of the loans he received.
- The lawyers argue Bankman-Fried couldn’t have known the loans were improper because of the lawyer’s involvement.
A Monday filing revealed that Sam Bankman-Fried’s lawyers have approached the court to allow them to rely on FTX co-founder Gary Wang’s testimony in the ongoing trial to disprove claims that Bankman-Fried acted fraudulently. The lawyers want to use the evidence to counter money laundering charges against Bankman-Fried.
Gary Wang told government prosecutors that he relied on legal advice in securing about $200 – 300 million loan from hedge fund Alameda Research which he used to fund venture investments on behalf of FTX and secure a house in the Bahamas. Furthermore, he mentioned the involvement of FTX attorneys in structuring and executing the loans, which Bankman-Fried was aware of.
Wang stated that, due to his reliance on the lawyer’s involvement, he had no reason to smell foul play. Wang told prosecutors he “didn’t think the loans were designed to hide the fact that money was coming from Alameda (and) didn’t think the lawyers would tell him to sign something that was illegal.”
Lawyers for Bankman-Fried argue that Wang’s testimony corroborates Bankman-Fried’s understanding that the loans were not improper. In addition, the lawyers want to use the evidence to excuse the blame put on the founder for dealings between FTX and Alameda Research.
“Mr Wang’s understanding that these were actual loans – structured by lawyers and memorialized in formal promissory notes that imposed real interest payment obligations – is relevant to rebut the inference that these were simply sham loans directed by Mr. Bankman-Fried to conceal the source of the funds,” the filing said.
However, before this filing, Judge Lewis Kaplan had already ruled that Bankman-Fried could not heap the blame on his lawyers. He added that the arguments over the legal advice could confuse or prejudice the jury.
Gary Wang made his court appearance last Thursday, where he spoke about the improper dealings within the defunct FTX. His testimony continues today before the prosecution introduces their key witness – Caroline Ellison, former head of Alameda Research. Both Wang and Ellison have pleaded guilty to the charges and are cooperating with investigators.
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