US prosecutors are discovering new components related to notorious former FTX CEO Sam Bankman-Fried (SBF). New allegations suggest that SBF used FTX’s funds to invest $400 million in a company last year.
Former FTX CEO used $400 million of the stock market for this company
US officials may have discovered another possible component of Sam Bankman-Fried’s cryptocurrency empire. Federal prosecutors alleged that Bankman-Fried used money from the FTX exchange to invest in venture capital (VC) firm Modulo Capital, according to The New York Times.
Previously, SBF’s hedge fund and FTX’s sister firm, Alameda Research, invested a total of $400 million in Modulo in 2022. This fund became one of SBF’s most important investments at that time. The funding has received particular attention from regulators as a relatively unknown firm, Modulo, has raised substantial capital for the crypto market in challenging times.
According to recent reports, the Modulo investment was most likely made with the proceeds of crime or embezzlement by FTX clients. Prosecutors said Modulo has become an important part of the investigation. FTX lawyers are now reportedly examining the assets of Modulo as they struggle to get back billions of dollars without repayment to their clients, investors and other creditors. Until now, the whereabouts of SBF’s $400 million investment is unclear.
New CEO John J. Ray raises FTX Token price with restructuring plans
The price of FTX Token had gained 32% in one day after the new CEO replacing SBF reiterated the idea of restarting the ailing exchange last week. John J. Ray said he is still working on uncovering and repurchasing FTX holdings and has tasked a group with investigating the possibility of relaunching the exchange’s international arm. The short-lived rally is again in the dark with new claims about FTX from the US.
As we quoted as Kriptokoin.com, FTX collapsed in November after a bank rushed into the stock market forcing the company to admit that it had no one-to-one reserves of client assets. The reserve shortfall meant that the exchange could not meet customers’ withdrawal requests. FTX eventually froze withdrawals and filed for bankruptcy. US prosecutors have since charged Bankman-Fried with eight financial crimes related to the collapse of FTX.
About Mudolo Capital
Modulo Capital was founded in March 2022 by Caroline Ellison, CEO of Bankman-Fried and Alameda, and three former executives of Jane Street. One of the founders, Duncan Rheingans-Yoo, was a college friend of SBF and Allison. Xiaoyun Zhang, another Modulo co-founder known as Lily, is a former Wall Street investor with some ties to SBF. Modulo is also known to run its operations from the same Bahamian housing community where SBF resides, she said.
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