Zhu Su and Kyle Davies, the founders of Three Arrows Capital (3AC), have been prohibited from engaging in regulated financial operations in Singapore for a period of nine years by the Monetary Authority of Singapore (MAS). The directives follow a MAS probe, which reportedly found that the now-defunct crypto hedge fund and its directors had broken numerous securities regulations.
Three Arrows Capital's founders are given a 9-year ban by MAS due to violations.
The restriction orders forbid Zhu and Davies from engaging in any regulated activity, from managing any Singapore capital market services firm, or from participating in its management or becoming a significant stakeholder. The notice stated that the restrictions were effective on September 13th.
3AC was initially punished by MAS in June for giving incorrect information and going beyond the allowed amount of assets under control. Further examination revealed 3AC had not informed regulators of the appointment of a portfolio manager, had misrepresented the manager's responsibilities, and had not implemented a sufficient risk management framework for its bitcoin investments.
According to MAS, Zhu and Davies' main duty as directors of 3AC was to ensure regulations were followed. The organization stated in the press release that "MAS' investigation showed that they had failed to carry out their responsibilities and were accountable for TACPL's breaches."
"Senior management of fund managers are required to implement robust risk management measures to protect the interest of investors," said MAS Assistant Managing Director Loo Siew Yee. Mr. Zhu and Mr. Davies' blatant disrespect for MAS' regulatory standards and violation of their directors' obligations is taken seriously by MAS.
The ban orders are the most recent repercussion of 3AC's demise last year. In July 2022, the well-known cryptocurrency hedge fund declared bankruptcy after losing almost all of its assets and accruing liabilities of over $3 billion. For alleged misbehavior, regulators in several jurisdictions have taken action against 3AC and its founders.
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