FTX CEO Sam Bankman-Fried's Legal Battle Expands to Lawyers' Involvement

cryptonews.com:

As the trial of Sam Bankman-Fried enters its second week, his lawyers are seeking to question FTX co-founder Gary Wang about his reliance on legal advice regarding loans from Alameda Research. 

In a legal filing made late Monday night, Bankman-Fried's defense team requested permission from the judge to explore Wang's understanding of these loans, which were used for venture investments and personal expenses, including purchasing a house in the Bahamas.

The defense argues that Wang's belief that these were legitimate loans, structured by lawyers and documented in formal promissory notes, is essential in countering the prosecution's claim that the loans were merely a ruse orchestrated by Bankman-Fried to conceal the origin of the funds. 

The filing highlights Wang's statement that he trusted the lawyers involved and didn't believe they would advise him to engage in any illegal activities.

The relationship between FTX and its hedge fund arm, Alameda Research, has become a focal point in the criminal case against Bankman-Fried. 

Prosecutors allege that he misused funds transferred to Alameda as his personal finances. 

Bankman-Fried has pleaded not guilty to the fraud charges, and his defense team contends that the involvement of company counsel in the loan arrangements suggests his lack of awareness regarding any impropriety. 

However, Judge Lewis Kaplan has ruled that discussions about legal advice could confuse or bias the jury and therefore cannot be included in the defense's opening statement.

Wang is expected to conclude his testimony on Tuesday, after which Caroline Ellison, the former head of Alameda Research and Bankman-Fried's former girlfriend, will take the stand. 

Both Wang and Ellison have pleaded guilty and are