Primecoin

Bankrupt cryptocurrency exchange FTX is suing venture capital (VC) firm Modulo Capital for $460 million in allegedly misused customer assets. Modulo Capital received a significant investment from Alameda Research last year.As previously reported, Alameda Research, FTX&#39;s sister trading firm, was thought to have invested roughly $400 million in Modulo in 2022 – one of the largest investments made by FTX under Bankman-leadership. Fried&#39;sFTX claims in a March 22 filing that the Alameda Research transaction was directed by Sam Bankman-Fried, with Alameda investing $475 million in Modulo in a series of transfers beginning in May 2022.According to the filing, Alameda entered into a limited partnership agreement with Modulo on June 16, which resulted in Alameda transferring the aforementioned monies to Modulo in consideration for 20% ownership of Modulo&#39;s Class A shares.Payments paid to entities previous to the bankruptcy filing may be taken back and redistributed to creditors in bankruptcy proceedings. While most unsecured creditors have a 90-day claw-back time, &#34;insiders,&#34; which includes general partners, have a one-year period.Modulo has agreed to reimburse $404 million in cash and give up its claim to $56 million in assets stored on FTX&#39;s crypto exchange, representing roughly 97% of FTX&#39;s initial investment, according to the settlement agreement. Alameda would also lose any claim to its Modulo shares as a result of the settlement.Modulo Capital was created in March 2022 by three former Jane Street executives, including Bankman-Fried and Alameda CEO Caroline Ellison.Bankman-Fried is also said to be in a love connection with one of the firm&#39;s founders, Xiaoyun &#34;Lily&#34; Zhang, which some believe motivated his urge to invest in the unknown VC firm. This rumor has yet to be confirmed.The agreement must still be approved by United States Bankruptcy Judge John Dorsey, who has scheduled a motion hearing on April 12.FTX noted in its most recent presentation to creditors on March 17 that claims against it had surpassed $11 billion, compared to only $4.7 billion in assets, for a total shortfall of nearly $7 billion, so while the $460 million settlement would be a huge win for creditors, it still represents less than 7% of the current shortfall.

FTX seeks to claw back $460M from Bankman-Fried-backed VC firm

ItsBitcoinWorld

Other articles published on Mar 23, 2023

SEC Warns Coinbase Over Crypto Offerings

6 Ethereum Altcoins Targeted By SEC Ahead of Coinbase Wells Notice

CEO Says GameStop is a “Much Healthier Business” Today as Shares Up 29% YTD

NFT Collection KOKODI Price, Stats, and Review

Is the Largest Ethereum Whale Activity of the Year Detected?

Ontology Foundation Incubates New Layer 2 Solution: Goshen Network

Join our free newsletter for daily crypto updates!