Insolvent digital currency trading protocol FTX is attempting to retrieve $460 million of reportedly embezzled users’ funds from hedge fund Modulo Capital, which got a substantial investment amount from Alameda Research in 2022.
According to former news, Alameda Research, known to be FTX’s sister exchange company, was realized to have pumped in an estimated $400 million in VC firm Modulo this past year, in one of the most significant acquisitions done by FTX during Sam Bankman-Fried’s tenure as CEO.
In a Wednesday signup, FTX contended that the investment made by its sister company was based on directives from SBF, with Alameda pumping in exactly $475 million into Modulo in different transfers from the past May.
In Mid-June, Alameda consented to a limited partnership contract with Modulo, upon which the already mentioned funds were sent to Modulo as a bid to own an estimated 20% of the venture capital type A stakes.
In accordance with insolvency proceedings, disbursement to entities before the insolvency signup is likely to be permitted to be retrieved and reshared to lenders.
Although the retrieval period is about three months for many unsecured lenders, it is about 12 months for “insiders,” or public partners.
According to the payment contract, Modulo consented to reimburse $404 million of funds and surrender its rights to $56 million worth of investments still in FTX custody, accounting for almost 97% of the insolvent exchange inceptive investment.