FTX management led by John Ray III is reportedly in talks with Modulo Capital founders to reclaim about $400 million that Sam Bankman-Fried invested in the hedge fund, New York Times reports.
Modulo Capital is a Bahamas-based hedge fund launched by former Jane Street traders Xiaoyun Zhang and Duncan Rheingans-Yoo. SBF reportedly invested about $400 million shortly before his empire collapsed.
Following FTX’s bankruptcy in November 2022, SBF’s investment in Modulo Capital was converted into cash and kept in an interest-bearing account at JPMorgan, sources close to the firm confirmed to NYT.
As part of the bankruptcy process, Modulo Capital was named as one of the firms to be probed for holding SBF’s investments.
However, the founders of Modulo Capital are reportedly negotiating with FTX to return the funds and be fried from the legal implications of their ties with SBF, NYT reported on Feb. 15.
If the $400 million Modulo Capital funds are fully recovered, FTX could be closer to raising about $8 billion needed to make its creditors whole. On Jan. 17, FTX lawyers disclosed that they had located about $5.5 billion of assets held in customers’ accounts across the bankrupt exchange.
FTX is reportedly looking to recover an additional $93 million from political donations, a $2.1 billion payment to Binance, $446 million in transfer to Voyager Capital, and $2 billion in insider loans.