Sam Bankman-Fried passed US$400 million to Modulo Capital

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During the first week of December 2022, when the Financial Times published spreadsheet listing Sam Bankman-Fried’s venture investments, it showed the former cryptocurrency kingmaker’s hedge fund, Alameda Research, had invested a total of US$400 million into a company called Modulo Capital. According to media reports, Modulo Capital is a multi-strategy hedge fund founded early this year by two former Jane Street traders and one developer. Surprisingly everyone related to this matter, including Modulo Capital, Sam Bankman-Fried and former Alameda Research CEO Caroline Ellison are maintaining a total silence. It may be mentioned here that, Jane Street is a New York-based proprietary trading firm where Sam Bankman-Fried and Caroline Ellison had worked before they floated FTX. Sam Bankman-Fried was known to hire former Jane Street employees as executives or employees, including former FTX US President Brett Harrison.

Also, public filings show Modulo was based in the Bahamas and operated from Albany, the same luxury condominium complex where Bankman-Fried and other FTX and Alameda employees resided.

According to media reports, Modulo Capital traded crypto as well as traditional financial assets. It approached several traditional financial institutions for funding before taking on Alameda as its sole investor.

Alameda’s investments are under heavy scrutiny as creditors await repayment from a grueling bankruptcy process involving the company and its sibling, FTX, a crypto exchange. In testimony before the US House Financial Services Committee last week, new FTX CEO John J. Ray III said the deficit was estimated at US$8 billion and “a complete lack of recordkeeping” has made it challenging to trace the money trail.

The list of investments on the spreadsheet also led to shocking revelations about how far Sam Bankman-Fried’s ties stretched, including speculation over whether or not he improperly used his money to buy influence or enrich associates. In addition to the US$400 million Modulo investment, Alameda also loaned US$43 million to the CEO of crypto news outlet The Block, invested US$25 million in Toy Ventures – a venture fund founded by FTX head of product Ramnik Arora – and acquired a US$270 million stake in the US Securities and Exchange Commission-licensed stock exchange IEX.

Meanwhile, there is huge criticism centering FTX and the entire crypto sector. Here are some of those criticisms:

Brian: Doesn’t anyone question why a company’s headquarters, especially one the only commodity is money, is in the Bahama’s? Do they think there might be something shady that will make them money on the sly? or their fortunes will be protected from taxes?

Catherine: It seems, this FTX and Alameda, are the personal loan entities of Sam Bankman-fried. Since when do Financial exchanges loan money like a payday loan store?

Jamima: All this money went to his friends at these companies. Take from the poor and give to the rich, the anti-Robin Hood.

Wayne: This is like Monopoly game. But they are playing with real money they steal from people through lies.

Morgan: Yep US$ 400 million for the three amigos from Jane Street all in the name of Ethical Altruism – or was that Naked Theft and Greed? All I know is Sam Bankman-Fried or SBF will spend a lot of time in jail and most everyone who he threw money at won’t as well as never pay it back. RIP FTX.

Matthew: These tens and hundreds of millions of dollars invested are in what form? Real money? FTT tokens? FTT tokens apparently are fake money.

Paul: The whole crypto house of cards will come crashing down soon. Why anyone would fork over real money for fake money will never understand. Get out while you can. What really irks me is that the prison sentences for Enron type crooks is about what some schlub with a shoebox full of pot gets.

Connie: Wow, he just distributed the money here and there as if it is his money.

Reynold: So, he had his former colleague setup a hedge fund headquartered in Bahamas and transfer US$ 400 million to invest in it. Hmm… so he siphoned out US$400 million to yet another proxy company/fund. What are the chances he is one of the owners of that fund as well behind the scenes and that 400 million made its way into his pocket somehow?

Martin: Someone needs to come up with a solution to these “Bankman” types. So-called mainstream media won’t do that as they are also beneficiaries of these Ponzi schemes. We need to look for news reports exposing crypto fraudsters and whenever we find some, it is our moral duty to spread such reports. People need to know how scammers like FTX, Binance etc are continuing to fool people.

Joseph: Sam Bankman-Fried is doing nothing but going to make a mockery of the judicial system, mommy and daddy will help see to it, his so-called girl friend had a lucid moment and skipped.

Thomas: I feel for folks who fell for this buffoon. But here is reality: If Legacy Media or politicians promote someone one should operate under the assumption the person, they promote is a criminal. Not 100% accurate, but close. Media lies regularly.

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