U.S. Federal prosecutors allege that Sam Bankman-Fried has used money from FTX exchange to invest in the VC
Rebeca Moen Jan 27, 2023 08:54
SBF contributed $400 million in Modulo Capital. Prosecutors believe Modulo investment was made using stolen or illegal funds.
The United States government may have uncovered another another component of Sam Bankman-cryptocurrency Fried's enterprise thanks to their investigation.
According to The New York Times, federal prosecutors in the United States have accused that Bankman-Fried invested money from the FTX exchange in the venture capital (VC) business Modulo Capital using funds obtained from the FTX exchange.
It was previously stated that SBF's hedge fund and FTX's sister business, Alameda Research, spent a total of $400 million in Modulo in 2022. This was one of SBF's most substantial investments, and it became one of the most prominent investments overall.
The fact that Modulo, a relatively unknown company, was able to raise a considerable amount of cash amid hard times for the cryptocurrency market drew the attention of authorities, who have shown a special interest in the fundraising.
According to the most recent information obtained by the detectives working for SBF, the investment in Modulo was most likely made using the profits of a crime or with money that had been stolen from FTX clients and placed with the exchange.
According to the authorities, Modulo had developed into an essential component of the inquiry.
As the attorneys for FTX struggle to collect the billions of dollars owed to reimburse their customers, investors, and other creditors, Modulo's assets are apparently coming into focus for their investigation.
The location of the SBF's 400 million dollar investment has not been revealed as of yet.
Modulo Capital was created in March 2022 by three former executives of Jane Street, a New York-based business that had employed Bankman-Fried and Alameda CEO Caroline Ellison.
According to reports, Duncan Rheingans-Yoo, who was purportedly one of the founders, had just recently graduated from college.
Xiaoyun Zhang, sometimes known as Lily, was another one of Modulo's co-founders. She had worked as a trader on Wall Street in the past and had some connections to SBF.
It is also common knowledge that Modulo operates its business out of the same condo complex in the Bahamas from where SBF operated.
The disclosure comes at a time when a commissioner for the United States Commodity Futures Trading Commission, Christy Goldsmith Romero, is calling into question the work that venture capitalists and money managers that sponsored FTX did in terms of their due diligence.
Earlier, the Deputy Prime Minister of Singapore confirmed that the investment company Temasek, which is controlled by the Singaporean government, was at risk of suffering "reputational harm" as a result of their investment in FTX.
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