FTX Wants To Recover $460 Million From Modulo Capital

Mar 23, 2023

온라인 슬롯 사이트

The fallen crypto exchange is doing everything to get back as much of its assets as possible.

Clawback

Crypto exchange FTX is $460 million from venture capital firm Modulo Capital, which allegedly misappropriated customer funds. The investment from Alameda Research to Modulo was understood to be around $400 million last year. This was one of the biggest investments undertaken by FTX under Sam Bankman-Fried’s leadership. In a recent filing, FTX claimed that Alameda invested $475 million in Modulo in a series of transfers starting in May 2022. The court filings reveal that the agreement came after constructive negotiations with Modulo and its principals. The recovered assets represent over 99% of Modulo’s remaining assets, and include $404 million in cash.

Dubious Venture Capital Firm

Modulo Capital is a hedge fund that was founded in March 2022 by three former executives at Jane Street. The New York-based firm that once employed Bankman-Fried and former Alameda CEO Caroline Ellison. Bankman-Fried is reported to have been in a romantic relationship with one of Modulo’s founders, Xiaoyun “Lily” Zhang. Some suspect that this was the motivation behind his push to invest in the obscure VC firm.

This was only one of the way the former leaders of FTX/Alameda Research tried to take as much money from the firms as possible. They also granted themselves generous “loans” all transferred to their private accounts.

Seed Capital From Alameda Research

The settlement is a clawback from Modulo Capital, a Bahamas-based hedge fund that received $475 million in seed capital from Alameda Research in 2022. The agreement would recover nearly all of the value transferred by Alameda to Modulo while avoiding the time and expense of pursuing the claims through litigation, according to FTX. The recovery could also help FTX restore its credibility in the crypto space after its bankruptcy filing in December 2021.

A Drop In the Ocean

The settlement still needs to be confirmed by United States Bankruptcy Judge John Dorsey, with a motion hearing scheduled for April 12. The recovery is a significant victory for FTX’s stakeholders, but only represents less than 7% of the current shortfall, as FTX’s claims against it surpassed $11 billion, compared to just $4.7 billion in assets for a total shortfall of nearly $7 billion.