Singapore Bans Three Arrows Capital Founders for Nine Years

<p dir="ltr">Singapore’s financial market regulator has banned the two founders of the collapsed crypto-focused hedge fund, Three Arrows Capital (3AC), from operating in the city-state’s financial services industry.</p><p dir="ltr">3AC Executives Banned in Singapore</p><p dir="ltr">According to the announcement today (Thursday), <a href="https://www.financemagnates.com/cryptocurrency/three-arrow-capital-founders-finally-speak-up-mull-over-move-to-dubai/">Zhu Su and Kyle Livingston Davies</a> will not be a part of the management of any Singapore-based company, nor can they act as Directors or “substantial shareholders” in any capital market services firm in the city-state. </p><p dir="ltr">Su was the Chief Executive at 3AC, while Davies was the Chairman. Both were also Directors at the company. The Monetary Authority of Singapore’s (MAS) ban against them became effective on 13 September.</p><p dir="ltr">Based in Singapore, 3AC was established in 2012. It became one of the most prominent cryptocurrency hedge funds and is known for its highly leveraged positions. However, the worries of the company started with a loss of at least $400 million with the <a href="https://www.financemagnates.com/cryptocurrency/blockchaincom-may-lose-270-million-over-its-loans-to-3ac/">downturn in the crypto market</a> last year. A court in the British Virgin Islands (BVI) <a href="https://www.financemagnates.com/cryptocurrency/news/three-arrows-capital-gets-liquidation-order-from-bvi-court/">ordered the liquidation of the fund</a> in June 2022.</p><p dir="ltr">Singapore’s Action against 3AC</p><p dir="ltr">The Singaporean regulator already reprimanded 3AC and its two founders in June 2022 for providing false information, failing to notify about the ownership change of the two executives, and also for exceeding the assets under the management threshold allowed for a registered fund management company. The latest ban came after <a href="https://www.financemagnates.com/tag/monetary-authority-of-singapore/">further investigation of the MAS</a> into the company for violations between August 2020 and January 2022.</p><p dir="ltr">As per the latest findings, the company failed to notify the regulator of the employment of its representatives but made false representations about it. Further, the company did not have in place a <a href="https://www.financemagnates.com/terms/r/risk-management/">risk management</a> framework to identify, monitor, and address risks associated with the cryptocurrency and digital asset investments under its management.</p><p dir="ltr">The action has been taken against the two executives as they were primarily responsible for all regulatory reporting. </p><p dir="ltr">“Senior management of fund managers are required to implement robust risk management measures to protect the interest of investors,” said Loo Siew Yee, Assistant Managing Director (Policy, Payments &amp; Financial Crime) at MAS. “MAS takes a serious view of Mr Zhu’s and Mr Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct.”</p>

This article was written by Arnab Shome at www.financemagnates.com.