Sam Banksman Freud gives $400 million to small crypto fund.

Media reports indicate that Sam Bankman-Fried (SBF) sent $400 million to Modulo Capital, a little-known crypto hedge fund run by a former Jane Street trader with a former FTX CEO. There are close relationships.

According to the New York Times (NYT), Modulo was founded in March 2022 before leveraging one of SBF’s most significant investments during his time at the helm of FTX.

The company reportedly had its offices in the same compound as SBF’s residence in Nassau, Bahamas, and had no public profile or trading history.

Modulo’s co-founders may have dated SBF.

The NYT claims that Duncan Rheingans-Yoo, one of Modulo’s founders, graduated from college just two years before starting the company. Additionally, the publication stated that Rheingans-Yoo’s business partner Xiaoyun Zhang, also known as Lily, Had a romantic past With SBF.

The report cited four unnamed people with alleged knowledge who claimed Ms Zhang worked at SBF’s former Wall Street firm Jane Street when Bankman Freud was there.

A spreadsheet published by the Financial Times in December 2022 and Reported by Alameda Research, another Bankman-Fried company, made two major investments in Modulo Capital of $250 million and $150 million in the third and fourth quarters of 2022, respectively, it appeared.

It is not known how much money Modulo had in addition to SBF’s investment. However, it had started trading cryptocurrencies some time ago. FTX went down. In November 2022. The company is currently out of business, the NYT reports.

The investment sparked concern.

SBF’s decision to put such a large sum into an unknown trading startup when its companies were losing so much money has reportedly raised the curiosity of law enforcement authorities.

During Bankman-Fried’s bail hearing in the Bahamas, a day after his arrest, prosecutors allegedly cited a sealed affidavit from a member of Bahamian law enforcement indicating that Manhattan Federal prosecutors are reviewing SBF’s Modulo investment to determine whether it was used. Illegal income.

Additionally, legal representatives of FTX’s new leadership are also reviewing Modulo’s assets, aiming to recover the billions of dollars lost when the crypto exchange collapsed.

According to reports, FTX’s lawyers made a slide presentation to the company’s creditors on January 17 marking the Modulo transaction as a prime candidate for recovery of funds. However, no one knows how much of the $400 million investment is left.

Although neither Duncan Rengans-Yu nor Xiaoyun Zhang have been charged with a crime, they have hired Ethan Goelman, a criminal defense attorney and former director of enforcement for the Commodity Futures Trading Commission (CFTC).

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