FTX Seeks To Clawback SBF’s $400 Million Sitting In JPMorgan Chase

• FTX’s lawyers are negotiating to reclaim $400 million parked in an account at JP Morgan Chase.&
• Sam Bankman-Fried had invested this money into a hedge fund called Modulo Capital.&
• Modulo’s founders are looking to free themselves of legal liabilities in exchange for the funds.&
• Prosecutors, lawyers, and investigators have been working to claw back billions of dollars spent by the bankrupt crypto exchange.&

The downfall of the Bahamas-based crypto exchange FTX last November triggered a race among bankruptcy lawyers, forensic investigators, and federal prosecutors to track down billions of dollars that were lost following the exchange’s implosion, in addition to the funds invested and spent by the exchange’s top management. The objective was to claw back and recover the lost funds and make the customers and creditors whole.&

FTX’s $400 million invested in Modulo Capital

According to a report by the New York Times, FTX’s bankruptcy lawyers have been able to track down $400 million of Sam Bankman-Fried’s investment portfolio sitting in an interest-bearing account at JPMorgan Chase. Bankman-Fried had invested this money in Modulo Capital, a crypto hedge fund that operated out of the same Bahamian compound where the bankrupt exchange’s former founder lived. 

The nearly half-billion-dollar investment caught the attention of investigators and prosecutors last month given the timing of the transaction. Modulo Capital reportedly received this investment shortly before FTX collapsed. Following FTX’s collapse in November last year, Modulo Capital’s holdings were converted into cash. That money has since been sitting in an account at JPMorgan, given that the bank was the trading firm’s primary broker.&

It is unclear at this time if Duncan Rheingans-Yoo and Xiaoyun Zhang, the hedge fund’s founders, were involved in any wrongdoing. People familiar with the matter revealed that the founders are negotiating a clearance from certain legal liabilities in exchange for returning the investment.&

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