Bankrupt crypto exchange FTX is making moves to recover $460 million of allegedly misappropriated customer funds from venture capital firm Modulo Capital.

The latter received a hefty investment from Alameda Research last year, understood to be worth around $400 million. In a recent filing, FTX claimed the investment from Alameda Research was at the direction of Sam Bankman-Fried, the founder of FTX. The filing reveals that Alameda invested $475 million in Modulo in a series of transfers starting in May 2022.

While Modulo has agreed to repay $404 million in cash and give up its claim to $56 million worth of assets held on FTX’s crypto exchange, representing almost 97% of FTX’s initial investment, the deal will still need to be confirmed by the United States Bankruptcy Judge John Dorsey. A motion hearing is set for April 12.

Modulo Capital was established in March 2022 by three former executives at Jane Street, where Bankman-Fried and former Alameda CEO Caroline Ellison previously worked.

Bankman-Fried is also said to have been in a romantic relationship with one of Modulo’s founders, Xiaoyun “Lily” Zhang, which some have speculated was the driving force behind his decision to invest in the little-known VC firm.

In bankruptcy proceedings, payments made to entities before the bankruptcy filing may be eligible for clawback and redistribution to creditors.

The clawback period is usually 90 days for most unsecured creditors, but insiders like general partners have a one-year period. While the settlement would be a significant win for creditors, it only represents less than 7% of the current shortfall of over $7 billion.