Earlier this month, the Financial Times published a spreadsheet showing the venture capital investments of Sam Bankman Fried’s Alameda Research. The list included a $400 million investment in a company called Modulo Capital. This is one of the bigger investments, but also the biggest mystery, because nobody knew about this company.
What is Module Capital?
In the above message, BowTiedNightOwl writes that it would be a Brazilian fund. After a check, this turned out not to be the case, given that the names did not completely match. It later emerged that it is a hedge fund founded earlier this year by two former Jane Street traders and one developer.
Modulo Capital has not yet responded to anything and neither Bankman-Fried nor former Alameda CEO Caroline Ellison have commented on this investment. Jane Street is a New York-based trading firm where Bankman-Fried and Ellison worked before making the switch to crypto.
At the moment they will sometimes think back with melancholy to the time at Jane Street, because now they both have a huge punishment hanging over their heads. In any case, Bankman-Fried was known for taking over former Jane Street employees for his own companies.
Research tells us that Modulo is located in the Bahamas and operated from the same luxury complex as FTX and Alameda Research. So they were cozy under one roof with Bankman-Fried and Ellison.
400 million dollars
In the end, Bankman-Fried invested 400 million dollars in Modulo Capital. The trading firm then used that money to invest in both crypto and traditional financial assets. Modulo Capital initially approached multiple parties from the traditional financial world to raise capital, before eventually partnering with Alameda Research as its sole investor.
“It didn’t seem very strange to me. Sam liked to throw money at things with a positive expectation value and former Jane Street employees generally make sure of that. At least it was better than the junk that Alameda Research sometimes threw money at.” said an insider against Coindesk.