SBF allegedly used FTX money to invest $400M in obscure VC firm

Authorities successful the United States mightiness person discovered yet different imaginable constituent of Sam Bankman-Fried’s (SBF) cryptocurrency empire.

U.S. national prosecutors person alleged that Bankman-Fried has utilized wealth from FTX speech to put successful the task superior steadfast Modulo Capital, according to a study by The New York Times.

As antecedently reported, SBF’s hedge money and FTX’s sister firm, Alameda Research, invested a full of $400 cardinal successful Modulo successful 2022, which became 1 of the largest investments by SBF. The backing has drawn peculiar attraction from regulators owed to Modulo — which is simply a comparatively chartless steadfast — raising a important magnitude of superior during pugnacious times for the crypto market.

According to the latest findings by SBF’s investigators, the Modulo concern was apt made utilizing transgression proceeds oregon misappropriated wealth that FTX customers had deposited with the exchange.

The prosecutors said that Modulo has emerged arsenic an important portion of the probe arsenic FTX lawyers are present reportedly eyeing Modulo’s assets arsenic they scramble to retrieve the billions of dollars from repaying their customers, investors and different creditors. So far, the whereabouts of SBF’s $400 cardinal concern is unclear.

Modulo Capital was founded successful March 2022 by 3 erstwhile executives astatine Jane Street, a New York-based steadfast that erstwhile employed Bankman-Fried and Alameda CEO Caroline Ellison. One of the founders, Duncan Rheingans-Yoo, was reportedly lone 2 years retired of college. Another Modulo co-founder, Xiaoyun Zhang, known arsenic Lily, was a erstwhile Wall Street trader who had immoderate ties with SBF. Modulo is besides known to tally its operations from the aforesaid Bahamian condo assemblage wherever SBF resided.

Related: Breaking: BlockFi uncensored financials reportedly shows $1.2B FTX exposure

The quality comes amid U.S. commissioner for Commodity Futures Trading Commission, Christy Goldsmith Romero, questioning the owed diligence enactment done by VCs and wealth managers who funded FTX. “Why did they crook a unsighted oculus to what should person been truly flashing reddish lights?” Romero asked.

Previously, the lawman premier curate astatine Singapore's government-owned concern steadfast Temasek admitted that their concern successful FTX caused “reputational damage” for the firm.