A look at Modulo Capital, a mysterious multi-strategy hedge fund founded in 2022 and based in Albany in The Bahamas, which received $400M from Alameda Research
Tracy Wang / CoinDesk : Tweets: @smtuffy , @hsakatrades , @founderannie , @fxmacro , @mattwalshinbos , @0x_tracy , @jcoviedo6 , @hsakatrades , and @smtuffy Tweets: Sean Tuffy / @smtuffy : SBF laundered money through a hedge fund run by ex Jane Street dudes https://finance.yahoo.com/... @hsakatrades : “Modulo approached several traditional financial institutions for funding before taking on Alameda as its sole investor” https://twitter.com/... Annie / @founderannie : Think of all of the credible founders behind the startups not properly funded while this guy was overfunded and allowed to not have a Board of Directors VC Q3 funding numbers Black founders .43% Latino founders .63% women founders 1.9% Legislation has to make this right https://twitter.com/... @fxmacro : when all is said and done there easily could be $2bio or more recouped for FTX investors ... https://twitter.com/... Matt Walsh / @mattwalshinbos : As expected, this is not the Brazilian firm, but some grift with friends of Sam: https://www.coindesk.com/... Tracy Wang / @0x_tracy : @HsakaTrades one big mystery solved https://www.coindesk.com/... JC Oviedo / @jcoviedo6 : “Also, public filings show Modulo was based in the Bahamas and operated from Albany, the same luxury condominium complex where Bankman-Fried and other FTX and Alameda employees resided.” https://twitter.com/... @hsakatrades : Modulo Capital, the fund that received the $400m of our money from the goblin, operated out of Albany, and was co founded by two Jane St traders. Probably part of the polycule too. https://twitter.com/... Sean Tuffy / @smtuffy : Also, now that he's been charged with money laundering, there's no reason to still be reporting on these things as “investments”
Context & Ripple Effects
Modulo Capital is the quietest corner of the FTX unwind: a multi-strategy fund founded in 2022 by two ex-Jane Street traders and domiciled in Albany, Bahamas, that took $400M from Alameda Research as its sole investor after reportedly failing to raise from traditional institutions. The transfer surfaced as one of the largest single outflows from Alameda before FTX's November collapse, and commentators like Sean Tuffy have alleged it functioned as a laundering channel for Sam Bankman-Fried, who faces money-laundering charges.
The story has since moved from revelation to recovery: FTX lawyers and Modulo are negotiating the return of the $400M, which sits in a JPMorgan account, and court filings now put the targeted recovery at $460M including $404M in cash. That makes Modulo one of the clearest tests of whether the estate can claw back related-party transfers made in the empire's final months.
First-order effects
- The FTX estate is directly pursuing Modulo's founders for the return of roughly $400M–$475M in seed capital, with the funds' location in a JPMorgan account giving negotiators a concrete asset to recover rather than an illiquid claim.
- Modulo's ex-Jane Street co-founders shift from anonymous beneficiaries to named counterparties in bankruptcy proceedings and, given the money-laundering allegations against Bankman-Fried, potential subjects of regulatory interest alongside the SEC and CFTC probes already aimed at FTX.com's handling of customer funds.
Second-order effects
- Traditional financial institutions that declined to fund Modulo are effectively vindicated by the collapse, reinforcing a counterparty-diligence standard where opaque offshore vehicles with crypto-only backers get shut out of mainstream funding.
- JPMorgan finds itself custodian of contested estate assets, illustrating how the FTX bankruptcy pulls major banks into crypto-fraud recovery mechanics they had no underwriting role in.
Third-order effects
- If the estate's clawback succeeds, it establishes a template for unwinding related-party transfers through lightly regulated offshore fund structures, raising the bar for hedge funds accepting concentrated capital from crypto trading firms.
- The pattern — customer funds moving through a 'back door' in FTX's bookkeeping into affiliated vehicles — feeds the legitimacy gap between crypto-native finance and institutional capital, likely accelerating calls for transparency rules governing fund flows between exchanges, market makers, and affiliated managers.
The trend: The FTX collapse is shifting crypto's center of gravity from opaque related-party capital flows toward court-supervised clawbacks and institutional-grade counterparty diligence.