Singapore’s MAS Imposes Long-Term Ban on 3AC Founders
The Monetary Authority of Singapore (MAS) has issued long-term prohibition orders against Zhu Su and Kyle Davies, the founders of the now-defunct crypto hedge fund Three Arrows Capital (3AC). According to MAS, Su and Davies have been banned from engaging in regulated business activities in Singapore for a period of nine years due to alleged violations of the country’s securities laws.
Background: Reprimand and Liquidation
In June 2022, MAS reprimanded 3AC for providing false information, failing to disclose directorship details, and exceeding the assets under management threshold. Shortly after, Three Arrows Capital faced liquidation as a result of struggles caused by the collapse of the Terra ecosystem. The hedge fund owed approximately $3.5 billion to its creditors at the time.
Additional Securities Law Breaches
MAS conducted further investigations into 3AC and its founders, revealing additional securities law breaches committed by the hedge fund between August 2020 and January 2022. These violations included failure to notify MAS about the employment of Cheong Jun Yoong Arthur as a portfolio manager within the required timeframe. MAS also accused Three Arrow Capital of misrepresenting Cheong’s management activities.
The regulatory body further stated that 3AC lacked an appropriate risk management framework to safeguard digital assets under its care. Su and Davies were held responsible for these violations and were found to have neglected their duties as co-founders.
MAS’ Response and Actions
Loo Siew Yee, MAS’ assistant managing director, expressed serious concern over Su and Davies’ disregard for regulatory requirements and dereliction of their directors’ duties. MAS intends to take action against senior managers who engage in such misconduct.
Dubai’s VARA Fines 3AC Founders
Additionally, Su, Davies, and their new exchange, OPNX, faced monetary fines imposed by Dubai’s virtual assets regulator, VARA (Virtual Assets Regulatory Authority).
Hot Take: 3AC Founders Face Long-Term Ban and Further Consequences
The Monetary Authority of Singapore has imposed a long-term ban on the founders of Three Arrows Capital, Zhu Su and Kyle Davies. This comes as a result of alleged violations of securities laws and failure to meet regulatory requirements. The ban prevents Su and Davies from engaging in regulated business activities in Singapore for nine years. MAS also revealed additional breaches committed by 3AC, including failure to notify the regulator about key personnel appointments and misrepresentation of management activities. The co-founders were held responsible for these violations. This ban follows a series of setbacks for 3AC, including liquidation due to the collapse of the Terra ecosystem. The founders have also faced fines from Dubai’s virtual assets regulator. MAS emphasizes its commitment to taking action against senior managers who engage in misconduct.
By
By
By
