• Sam Bankman-Fried (SBF) invested $400 million in Modulo Capital in 2022.
• SBF had a relationship with one of the founders of the company, Xiaoyun Lily Zhang.
• SBF is currently being investigated for recklessly handling funds, with $500 million already seized from him.
Sam Bankman-Fried (SBF), the ex-CEO of FTX, is being investigated for recklessly handling funds after it was revealed that he had invested $400 million in Modulo Capital in the third and fourth quarters of 2022. Modulo Capital is a trading firm that was launched in March 2022 and had received two large sums of money from Alameda Research, totaling $400 million.
The Financial Times uncovered this information after finding a spreadsheet that showed how the funds were sent in two separate payments, $250 million in the third quarter, and another $150 million in the fourth quarter. It is believed that the $400 million was transferred from SBF’s FTX funds.
The relationship between SBF and Modulo Capital’s founder, Xiaoyun „Lily“ Zhang, is what makes this transaction even more dubious. Zhang had worked at Jane Street Capital for a decade, coinciding with the period when SBF worked there too. Reports have suggested that the two had a romantic relationship. The other co-founder of the company, Duncan Rheingans-Yoo, had only graduated from Havard two years prior to the transaction.
The new handlers of FTX are now searching for assets that can be used to reimburse customers, and in the process, they have found out about SBF’s involvement with Modulo Capital. As a result, more than $500 million has already been seized from SBF. The investigation is ongoing, and it remains to be seen how much more money will be taken from him.