FTX management led by John Ray III is said to be in talks with the founders of Modulo Capital to recoup around $400 million that Sam Bankman-Fried invested in the hedge fund, The 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 around $400 million shortly before its empire collapsed.
Following FTX’s November 2022 bankruptcy, SBF’s investment in Modulo Capital was converted to cash and held in an interest-bearing account at JPMorgan, sources close to the company confirmed to the NYT.
As part of the bankruptcy process, Modulo Capital has been named as one of the companies to be probed to hold SBF’s investments.
However, the founders of Modulo Capital are said to be negotiating with FTX to return the funds and be extricated from the legal implications of their ties to SBF, NYT reported February 15.
If Modulo Capital’s $400 million funds are fully recovered, FTX could be closer to raising the roughly $8 billion needed to make its creditors whole. On January 17, lawyers for FTX revealed that they had located approximately $5.5 billion in assets held in client accounts on the bankrupt exchange.
FTX is reportedly seeking to recoup an additional $93 million in political donations, a $2.1 billion payout to Binance, a $446 million transfer to Voyager Capital, and $2 billion in insider loans.