Federal prosecutors in the United States are investigating a $400 million investment made by Sam Bankman-Fried, the former CEO of FTX, in the hedge fund Modulo Capital.

The investigation is focused on whether Bankman-Fried invested FTX customer funds into the hedge fund while Alameda Research, an affiliate market maker of FTX, was suffering from the collapses of other crypto firms.

Prosecutors suspect that Bankman-Fried invested in the hedge fund through misappropriated FTX customer funds.

A Bahamian prosecutor revealed their knowledge of the hedge fund’s existence during Bankman-Fried’s bail hearing in Nassau, Bahamas before he was extradited to the US.

The former FTX CEO now faces eight criminal charges in the US, including wire fraud, conspiracy to commit money laundering and political campaign finance violations.

Additionally, the SEC has charged Bankman-Fried for allegedly abusing $1.8 million in investor funds.