In the latest news from the US bankruptcy court, hedge fund Modulo Capital is seeking to return a $400 million investment made by the FTX liquidation team and FTX founder Sam Bankman-Fried (SBF). As reported by Reuters on March 22, the agreement has been reached, and Modulo Capital has waived its claims on FTX assets worth $56 million.
FTX and Alameda have agreed to relinquish all ownership rights to Modulo as part of the agreement. However, this agreement must still be approved by U.S. Bankruptcy Court Judge John Dorsey.
It is important to note that FTX’s sister company Alameda Research invested $400 million in Modulo Capital, an unnamed hedge fund in the Bahamas, in early 2022, as reported by the New York Times late last year. The company is based in Albany, a luxury resort in the Bahamas where FTX’s headquarters are located, and FTX employees also resided at the same resort.
Interestingly, Modulo Capital was founded by two former traders and one developer from Jane Street, where SBF worked, and it seems that they had a very close relationship with him. In fact, the New York Times reported on January 25, citing four well-informed sources, that “Sam Bankman-Fried was in a romantic relationship with Zhang Xiaoyun, one of the founders of Modulo.” Zhang Xiaoyun worked at Jane Street for more than 10 years, and SBF worked as a colleague for 3 years.
This news raises questions about potential conflicts of interest and the close relationships between individuals in the financial industry. The fact that Modulo Capital was founded by former colleagues of SBF and that he was romantically involved with one of the founders could raise concerns about potential insider trading or other improprieties.
It remains to be seen how Judge Dorsey will rule on the agreement reached between Modulo Capital, FTX, and Alameda Research. The outcome of this case could have significant implications for the financial industry and the regulation of hedge funds and other investment vehicles. As always, we will continue to follow this story closely and provide updates as they become available.
Read more:
- $1 Billion Class-Action Suit Filed Against “FTX Influencers” For Alleged Fraudulent Promotion
- FTX Founders And Executives Received $3.2 Billion From Alameda Research, As Revealed In Bankruptcy Filing
- FTX Had A $6.8 Billion Shortfall In Its Balance Sheet When It Filed For Bankruptcy Last November