SBF allegedly used FTX money to invest $400M in obscure VC firm
Authorities in the US may need found yet one more attainable element of Sam Bankman-Fried’s cryptocurrency empire.
U.S. federal prosecutors have alleged that Bankman-Fried has used cash from FTX trade to spend money on the enterprise capital (VC) agency Modulo Capital, according to The New York Occasions.
As beforehand reported, SBF’s hedge fund and FTX’s sister agency, Alameda Analysis, invested a complete of $400 million in Modulo in 2022, which grew to become one of the crucial vital investments by SBF. The funding has drawn explicit consideration from regulators resulting from Modulo — a comparatively unknown agency — elevating substantial capital throughout difficult occasions for the crypto market.
In keeping with the most recent findings by SBF’s investigators, the Modulo funding was doubtless made utilizing felony proceeds or misappropriated cash that FTX clients had deposited with the trade.
The prosecutors mentioned that Modulo had develop into an necessary a part of the investigation. FTX attorneys at the moment are reportedly eyeing Modulo’s belongings as they scramble to get well the billions of {dollars} from repaying their clients, traders and different collectors. Up to now, the whereabouts of SBF’s $400 million funding are unclear.
Modulo Capital was based in March 2022 by three former executives at Jane Avenue, a New York-based agency that when employed Bankman-Fried and Alameda CEO Caroline Ellison. One of many founders, Duncan Rheingans-Yoo, was reportedly solely two years out of faculty. One other Modulo co-founder, Xiaoyun Zhang, often called Lily, was a former Wall Avenue dealer with some ties with SBF. Modulo can also be identified to run its operations from the identical Bahamian apartment group the place SBF resided.
Associated: Breaking: BlockFi uncensored financials reportedly reveals $1.2B FTX publicity
The information comes amid U.S. commissioner for Commodity Futures Buying and selling Fee, Christy Goldsmith Romero, questioning the due diligence work carried out by VCs and cash managers who funded FTX. “Why did they flip a blind eye to what ought to have been actually flashing pink lights?” Romero asked.
Beforehand, the deputy prime minister of Singapore, admitted that the government-owned funding agency Temasek confronted “reputational injury” resulting from their funding in FTX.
