SBF allegedly used $400 million in FTX client deposits to invest in unknown VC firms.

US prosecutors accuse Sam Bankman-Fried of Use FTX client deposits to invest in venture capital (VC) Modulo Capital. According to the reportof The New York Times

SBF’s hedge fund and FTX affiliate Alameda Research.investThe $400 million valuation in Modulo in 2022, which has become one of SBF’s most significant investments by funding, has drawn particular attention from regulators because Modulo is a relatively unknown company. But it raised a lot of capital during a challenging time for the crypto market.

According to recent findings by SBF investigators, Modulo investments were likely made using funds obtained from criminal activities or embezzling funds deposited by FTX clients.

Prosecutors said Modulo became an important part of the investigation. FTX’s attorneys are reportedly keeping an eye on Modulo’s assets as they try to salvage billions of dollars to return to customers, investors and other creditors. SBF’s $400 million investment is unclear.

Modulo Capital was founded in March 2022 by three former executives at Jane Street, a New York-based firm. which was once an employee of Bankman-Fried and Alameda CEO Caroline Ellison, reportedly one of its founders, Duncan Rheingans-Yoo. Just two years out of college. And another Modulo co-founder, Xiaoyun Zhang, also known as Lily, is a former Wall Street trader affiliated with SBF, and Modulo also operates out of the same condo in the Bahamas where SBF lives.

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