Former FTX founder Sam Bankman-Fried sent $400 million to unknown fund

What is the average cost of $400 million among friends, especially if the friend is romantically involved with you? The more we learn about the fall of disgraced FTX founder Sam Bankman-Fried SBF, the more we realize that his empire was built on a house of cards to steal more from the average investors and dole the cash to politicians and lovers. The case of FTX collapse will be a business school case study of corporate greed and bad decisions.

Not long before the public knowledge of FTX collapsed, it turned out that its founders and former CEO, Sam Bankman-Fried, sent $400 million to an unknown hedge fund called Modulo Capital. A Jane Street trader co-founded a firm that was just 2 years out of college, according to a report by the New York Times.

One of the founders of Modulo Capital was once romantically involved with the disgraced Bankman-Fried, and the other, Duncan Rheingans-Yoo, was just two years out of college. Xiaoyun Zhang, also known as Lily, was a former Wall Street trader who had previously been romantically involved with Mr. Bankman-Fried, The Times said.

In March of 2022, Modulo Capital was founded before receiving one of Bankman- Fried's largest investments. SBF's decision to provide $400 funding to a new cripto trading startup at the same time that sister company Alameda was losing money raised suspicions and attracted the attention of investigators.

According to a spreadsheet shared by the Financial Times in December 2022, Alameda Research, the trading firm co-founded by Bankman-Fried, invested two separate sums in Modulo - $250 million and $150 million.

Other documents from lawyers handling FTX's bankruptcy, which was examined by BusinessInsider, showed that $400 million was given in the third and fourth quarters of 2022.

CoinDesk was the first to report that Modulo's founders used to work at Jane Street Capital, the trading firm where Bankman- Fried began his career. The identity of the founders of Modulo Capital was not published by Coindesk.

Early this month, Bankman-Fried, 30, pleaded not guilty of federal fraud charges to eight federal fraud charges related to the collapse of the now-bankrupt FTX. His trial is scheduled for October 2.

Bankman- Fried was the second-biggest donor in 2020 after he donated $5.2 million to Joe Biden's campaign.

Bankman- Fried founded FTX in 2019 with his co-founder Gary Wang. The Bahamas-based exchange FTX offers derivatives products like futures and options and spot trading. FTX, once an unknown company, has become a key player in the space, rivaling the likes of Coinbase and Binance.