FTX is trying to get back $400 million sitting in a JPMorgan account that Sam Bankman-Fried had previously invested in an obscure hedge fund: report
Lawyers for FTX are trying to claw back $400 million that disgraced founder Sam Bankman-Fried invested in little-known trading firm Modulo Capital, funds that are now reportedly sitting in a JPMorgan Chase account.
Around the time FTX filed for bankruptcy late last year, Modulo's holdings were converted into cash and placed in an interest-bearing account at the bank, according to theThe funds are still being held at JPMorgan because the bank served as the hedge fund's prime broker, according to the report. It's unclear why US prosecutors have not seized the Modulo assets at JPMorgan. The bank did not immediately respond to Insider's request for comment.
Modulo, started by two former Jane Street traders, received one of Bankman-Fried's single-largest investments. The $400 million was given in the third and fourth quarters of 2022, documents from lawyers handling FTX's bankruptcy reviewed byThe founders of Modulo, Duncan Rheingans-Yoo and Xiaoyun"Lily" Zhang, have not been accused of any wrongdoing. However, the firm's ties to Bankman-Fried have raised questions from prosecutors.
Modulo and FTX attorneys are now negotiating the return of those funds, sources told the Times. The move is part of an effort to repay the billions owed to creditors of the failed exchange. Last month, FTX's lawyers said the firms has so far located $5.5 billion in liquid assets.
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