Illustration: Sarah Grillo/Axios
FTX reached a deal to recover over $400 million from hedge fund Modulo, which in 2022 received $475 million in seed money from Alameda Research, at the direction of disgraced founder Sam Bankman-Fried
- Announcing the move in a bankruptcy court filing, the crypto exchange said Modulo will return about $460 million worth of "shareholder value," including $404 million in cash, without litigation.
Why it matters: This is the first of Bankman-Fried's investments via sister trading firm Alameda to get clawed back — and maybe not the last.
The big picture: Since the implosion of FTX in early November, it emerged that customer funds had been secretly funneled to Alameda Research by Bankman-Fried.
- The latter, which he mostly owned, had served as a conduit for his various private investment interests, including startups and other funds.
Flashback: In May 2022, Alameda invested $25 million into Bahamas-based Modulo — founded by former Jane Street employees Xiaoyun Zhang and Duncan Rheingans-Yoo — and later $450 million into its fund.
Details: As part of the deal, Modulo will pay $404 million in cash, and give up its claim to $56 million in assets held on FTX's crypto exchange.
- FTX and Alameda also agree to give up any claims of ownership of Modulo, and won't take further legal action against the firm and its managers.
The big question: Which — if any — other of Bankman-Fried's investments could end up giving the money back, likely to avoid lawsuits.
Go deeper: FTX asks for its political donations back
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