Criptocurrency exchange FTX retracts most of money it sent to fund

According to court documents filed on Wednesday, FTX has retracted 97% of the money that FTX companies sent to the hedge fund in 2022 after getting more than $400 million in cash from hedge fund Modulo Capital.

According to a filing in the U.S. bankruptcy court in Delaware, Bahamas-based Modulo agreed to pay $404 million in cash and give up its claim to $56 million in assets held on FTX's criptocurrency exchange.

In November, FTX filed for bankruptcy protection, saying it was unable to fully repay customers who had deposited funds on its exchange. The CEO of FTX, John Ray, said his top priority was recovering assets to repay FTX customers.

FTX's affiliated hedge fund, Alameda Research, sent $475 million to Modulo in a series of transfers beginning in May 2022, a time when FTX was losing money and heading for bankruptcy, according to the court filings.

Alameda, at the direction of FTX founder Sam Bankman-Fried, had paid $25 million to acquire a stake in Modulo and contributed $450 million to an investment fund managed by Modulo, according to the filings.

According to the filings, the settlement recovers most of the payments and takes 99% of Modulo's remaining assets.

FTX and Alameda will give up their claim to any ownership of Modulo as part of the settlement. According to the filings, FTX also agreed not to take further actions against Modulo or its principals Xiaoyun Zhang and Duncan Rheingans-Yoo related to the 2022 payments.

FTX, Bankman- Fried, and Modulo Capital did not respond immediately to requests for comment.

FTX recovered more than $5 billion in its bid to repay customers of the bankrupt criptocurrency exchange. FTX said last week that it was looking into more than $3.2 billion that was transferred from the company through payments and loans to company founders and key employees.

Bankman- Fried was charged with stealing billions of dollars in FTX customer funds to cover losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C.

He denies any wrongdoing and is trying to stay out of jail until his scheduled Oct. 2 fraud trial.