FTX Bankruptcy Estate reclaims $460m from hedge fund linked to Sam Bankman-Fried

On Wednesday, FTX Estate filed a motion to enter into a settlement that would recover $460 million in assets for stakeholders, representing a major victory in the ongoing bankruptcy proceedings. The funds are part of a clawback from Modulo Capital, an investment firm and hedge fund, based in the Bahamas formed by Xiaoyun “Lily” Zhang and Ducan Rhenigans-Yoo, with seed capital of $475 million from Alameda Research in 2022. Zhang and Rhenigans-Yoo had close ties to the former FTX CEO, Sam Bankman-Fried.

The court filings revealed that the agreement was arrived at following productive negotiations between Modulo Entities and their principals. The $460 million in assets recovered represents over 99% of Modulo’s remaining holdings, comprising a total of $404 million in cash and relinquishing any claim on $56 million in assets held at FTX.com and FTX.US. According to the filing, the settlement allows for almost all of the transferred value by Alameda Debtors to be returned to Modulo Entities while saving time and resources that would have been used in pursuing claims through litigation.

In November last year, a leaked spreadsheet of Alameda’s venture capital investments revealed that Modulo Capital, an enigmatic hedge fund, was awarded hundreds of millions of dollars in funding. It has since emerged that ex-traders founded Modulo from Jane Street, the firm where Sam Bankman-Fried had worked before founding Alameda Research.