Sam Bankman-Fried Wants to Examine Lawyers' Role in $200M Alameda Loans

<p>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. </p><p>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.</p><p>Unraveling FTX-Alameda Research Links</p><p>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 <a href="https://www.financemagnates.com/tag/alameda-research/" target="_blank" rel="follow">Alameda Research</a> to fund venture investments by
FTX and to fund his purchase of a house in the Bahamas." </p><p>The relationship between <a href="https://www.financemagnates.com/tag/ftx/" target="_blank" rel="follow">FTX</a> 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.</p><p>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 <a href="https://www.financemagnates.com/terms/n/negative-balance/">negative balance</a> and making "unlimited withdrawals"
from FTX's accounts.</p><p>Key Testimony from Caroline Ellison </p><p>Caroline Ellison, the former CEO of Alameda Research, will
take the stand today (Tuesday). Her testimony holds immense importance in the case
against SBF, accused of orchestrating a scheme to misappropriate billions of
dollars from FTX customer accounts.</p><p>Last week, prosecutors revealed that Alameda Research <a href="https://www.financemagnates.com/cryptocurrency/ftxs-co-founder-admits-fraud-with-sam-bankman-fried-report/">had access to a line of credit</a> of up to $65 billion, which served as collateral for
its bets. This sum exceeded the credit extended to other major investors,
raising questions about preferential treatment within FTX. Last week, according
to a report by CNN, Wang acknowledged that these advantages were not openly
shared with FTX's customers or investors. </p>

This article was written by Jared Kirui at www.financemagnates.com.