FTX seeks to claw again $460M from Bankman-Fried-backed VC agency


Related articles

Bankrupt crypto trade FTX is in search of to recuperate $460 million of allegedly misappropriated buyer funds from enterprise capital (VC) agency Modulo Capital, which obtained a sizeable funding from Alameda Analysis final yr.

As beforehand reported, FTX’s sister buying and selling agency, Alameda Analysis was understood to have invested round $400 million in Modulo in 2022 — one of many largest investments undertaken by FTX below Bankman-Fried’s management.

In a March 22 filing, FTX declare the funding from Alameda Analysis was below the path of Sam Bankman-Fried, with Alameda investing $475 million in Modulo in a collection of transfers starting in Might 2022.

On June 16, Alameda entered right into a restricted partnership settlement with Modulo,  based on the submitting, which resulted in Alameda transferring the aforementioned funds to Modulo in trade for possession of 20% of Modulo’s Class A shares.

In chapter proceedings, funds made to entities previous to the chapter submitting could also be eligible to be clawed again and redistributed to collectors. Whereas the claw-back interval is 90 days for many unsecured collectors, it’s one yr for “insiders,” a time period that features normal companions.

As per the settlement settlement, Modulo has agreed to repay $404 million in money and can hand over its declare to $56 million value of belongings held on FTX’s crypto trade, representing almost 97% of FTX’s preliminary funding.

The settlement would additionally lead to Alameda dropping any declare to its Modulo shares.

Modulo Capital was based in March 2022 by three former executives at Jane Road, a New York-based agency that when employed Bankman-Fried and Alameda CEO Caroline Ellison.

Bankman-Fried can also be rumored to have been in a romantic relationship with certainly one of its founders, Xiaoyun “Lily” Zhang, which some have theorized was the motivation behind his push to spend money on the obscure VC agency. This rumor has not been verified. 

The deal will nonetheless must be confirmed by United States Chapter Decide John Dorsey, with a movement listening to set for April 12.

Associated: FTX debtors file lawsuit against exchange’s Bahamian arm on ownership of property

In its latest presentation to creditors on March 17, FTX famous claims in opposition to it surpassed $11 billion, in comparison with simply $4.7 billion in belongings for a complete shortfall of almost $7 billion, so whereas the $460 million settlement could be an enormous win for collectors it nonetheless solely represents lower than 7% of the present shortfall.

FTX’s abstract of claims vs belongings in a presentation to collectors. Supply: Kroll

Journal: Best and worst countries for crypto taxes — plus crypto tax tips