Alameda Invested $400M in Startup that Shares Same Community as SBF

Modulo Capital, a multi-strategy hedge fund that has a lot in common with Sam Bankman-Fried (SBF) was given a loan of $400 million by Alameda Research.

According to a published spreadsheet listing SBF’s venture investments earlier in the month, it was revealed that FTX’s sister firm invested $400 million into Modulo Capital.  The spreadsheet also shows other questionable investments made by SBF and Alameda

Interestingly, Modulo which was founded in early 2022, operated from its office which was situated in the same Bahamian condominium community where SBF and other FTX workers lived. The $400 million loan to the multi-strategy hedge fund founded by two former Jane Street traders and one developer appears to be SBF and Alameda’s largest investment.

According to sources familiar with the matter, the relatively unknown company had approached other investment firms before landing Alameda as its sole investor.

SBF and Alameda Investments Under Scrutiny

Notably, the infamous ex-CEO of FTX has since been arrested before he could testify before the House Committee on Financial Services. SBF was charged with wire and securities fraud, conspiracy to commit wire and securities fraud, and money laundering.

After the sudden collapse of FTX, SBF has been under scrutiny for its management of the firm’s funds. At one time, SBF reportedly pocketed $300 million from the exchange’s $420 million raised in October 2021.

A few days ago, the United States Commodity Futures Trading Commission (CFTC) initiated legal action against SBF and Alameda Research. The filing stated that the use of customers’ funds by Alameda was not authorized by FTX customers and the customers were not informed that their funds were being used by Alameda.

Prior to the charges, the bankrupt CEO in an interview said he can not give the exact answers to questions asked about the funds he transferred to his sister trading firm. He is only sure about FTX customers transferring funds to Alameda, but what Almeda did to the funds is unknown to him.

Before its sudden collapse which has had varying cascading effects on the crypto industry, FTX was valued at $32 billion.