Prosecutor Found FTX Money in Modulo Capital
2023.01.26 08:37
Prosecutor Found FTX Money in Modulo Capital
By Tiffany Smith
Budrigannews.com – Authorities in the United States may have discovered yet another potential component of the cryptocurrency empire of Sam Bankman-Fried (SBF).
According to a report published by The New York Times, federal prosecutors in the United States claim that Bankman-Fried invested in the venture capital firm Modulo Capital with funds obtained from the FTX exchange.
Alameda Research, the hedge fund of SBF and FTX’s sister company, invested $400 million in Modulo in 2022, making it one of SBF’s largest investments. Regulators have paid close attention to the funding because Modulo, a relatively unknown company, raised a significant amount of capital during difficult crypto market conditions.
The Modulo investment was most likely made with criminal proceeds or money that FTX customers had deposited with the exchange, as the most recent findings by SBF investigators indicate.
According to the prosecutors, Modulo has become an important part of the investigation because FTX lawyers are now reportedly looking at Modulo’s assets as they try to recover billions of dollars from repaying customers, investors, and other creditors. SBF’s $400 million investment remains unknown at this time.
Three former executives from Jane Street, a New York-based company that employed Bankman-Fried and Alameda CEO Caroline Ellison, founded Modulo Capital in March 2022. According to reports, Duncan Rheingans-Yoo, one of the founders, was only two years out of college.
Xiaoyun Zhang, also known as Lily, a co-founder of Modulo, was a Wall Street trader who had some ties to SBF. It is also known that Modulo operates from the same condominium community in the Bahamas where SBF lived.
The news comes as Christy Goldsmith Romero, the US commissioner for the Commodity Futures Trading Commission, questions the VCs and money managers who funded FTX’s due diligence. What really ought to have been flashing red lights? Why did they ignore it? Romero inquired.
Prior to this, the deputy prime minister of Temasek, a government-owned investment firm in Singapore, acknowledged that the company’s investment in FTX resulted in “reputational damage.”
