FTX Set To Reclaim $460M From Bahamas-Based Hedge Fund In Settlement

Bankrupt cryptocurrency exchange FTX is making strides to recover some customer funds that were allegedly misused. The company submitted a motion on Wednesday to reclaim $460 million in assets for its stakeholders.

The funds are expected to be retrieved from Modulo Capital, a Bahamas-based hedge fund that received approximately $475 million from Alameda Research, FTX's investment division, over the course of 2022, Bloomberg reported.

Previous reports indicate that the investment in Modulo Capital was among FTX's largest under the guidance of its former CEO, Sam Bankman-Fried.

The recent filing implies that SBF may have directly instructed Alameda Research to conduct multiple investments in Modulo, with transactions starting in May 2022.

FTX is settling with Modulo Capital for $460 million.

First big "clawback". pic.twitter.com/JNHn2bhNLb

— FTX 2.0pium (FTX Creditor) (@AFTXcreditor) March 22, 2023

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A partnership between Modulo and Alameda was established on June 16, which involved Alameda transferring funds to Modulo in exchange for a 20% stake in Modulo's Class A shares.

Modulo Capital, founded in March 2022, was managed by three ex-Jane Street executives, a New York-based company where Bankman-Fried was previously employed.

According to the settlement agreement, Modulo has consented to repay $460 million to FTX, which accounts for 97% of the total investment received from the bankrupt exchange.

Modulo plans to pay $404 million in cash and relinquish its claim to $56 million in assets on FTX's crypto exchange.

The settlement also affects Alameda, causing it to forfeit all claims to Modulo shares.

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