The Monetary Authority of Singapore Bans Founders of Failed Crypto Hedge Fund
The Monetary Authority of Singapore (MAS) has imposed a nine-year ban on the founders of Three Arrows Capital (3AC), a failed crypto hedge fund. Former CEO Zhu Su and Chairman Kyle Davies are prohibited from managing, directing, or becoming shareholders of any capital market services firms in Singapore for the duration of the ban.
Three Arrows Capital: Once One of the Largest Crypto Hedge Funds
Three Arrows Capital, which was once one of the largest crypto hedge funds with $10 billion in assets under management, filed for bankruptcy in July 2021. The fund faced financial difficulties following the collapse of the Terra ecosystem and had debts amounting to $3.5 billion.
After the MAS discovered that 3AC had provided false information and breached regulatory requirements, it conducted further investigations. These investigations revealed additional breaches, including failure to notify the MAS about a new hire in a timely manner and providing false information about the hire’s responsibilities. The MAS stated that it takes a serious view of such misconduct and will remove senior managers who engage in such behavior.
Following its emergence from bankruptcy, Three Arrows Capital rebranded itself as 3AC Ventures.
Dubai’s VARA Imposes Fine on Reborn Three Arrows Capital
In August, OPNX and its founders were fined approximately $2.7 million by Dubai’s Virtual Assets Regulatory Authority (VARA) for violating market regulations. Separate fines of $54,000 each were imposed on OPNX founders Davies, Zhu, and Mark Lamb, as well as CEO Leslie Lamb.
Hot Take: Lessons Learned from Three Arrows Capital’s Failure
The case of Three Arrows Capital highlights the importance of regulatory compliance and risk management in the crypto industry. It serves as a reminder that providing false information and neglecting regulatory requirements can have severe consequences, including bans and fines. Crypto hedge funds and other market participants should prioritize transparency, accurate reporting, and adherence to regulatory frameworks to maintain trust and credibility in the industry. The failures of Three Arrows Capital should serve as a cautionary tale for all crypto businesses.
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