Investigation on FTX and Alameda Research: Do Kwon is rubbing his hands!

We are not done with the antics of Sam Bankman-Fried and his run-ins with the law. The former CEO of FTX is accused of having diverted funds from customers of his exchange to invest in the company Modulo. Here is what it is.

SBF invested in a little-known venture capital firm

After pleading not guilty to the fraud allegations, SBF faces new charges. Indeed, US prosecutors suspect the founder of bankrupt crypto exchange FTX of committing another wrongdoing. They allege that Bankman-Fried allegedly took $400 million of FTX client funds to invest in Modulo. The latter happens to be a little-known venture capital firm.

He was revealed that two SBF companies have invested in the venture capital company Modulo. This is the hedge fund of SBF and its trading company Alameda Research. Intriguing fact: SBF would have made its investment during the period of bear market hardeningin 2022. It is precisely this state of affairs that has intrigued the regulators, especially since the Modulo company is relatively unknown.

Confirmed suspicions?

After several investigations, the authorities concluded that the investment was not made in a legal manner. They believe it was done with criminal or embezzled proceeds (FTX client funds).

Modulo, a crucial element in the investigation?

Now, Modulo is an important part of prosecutors’ investigation into the bankrupt exchange.

So, FTX’s lawyers are no longer just concerned with recovering the funds to be reimbursed to the creditors of the exchange. They also need to focus on Modulo assets. The prosecutors want to understand this investment of 400 million dollars not very net of SBF in full bear market.

The venture capital firm Modulo Capital was founded in March 2022. It is a project of three former executives of Jane Street, which is a New York-based company. Bankman-Fried and Alameda CEO Caroline Ellison worked at Jane Street. Among the founders of Modulo is Duncan Rheingans-Yoo, who graduated from university just two years ago. There is also Xiaoyun Zhang, known as Lily and linked to SBF. The venture capital firm happened to operate from the same Bahamian condominium where SBF resided.

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