Singapore Monetary Authority Slaps 3AC Founder With a 9-Year Finance Ban

Singapore Monetary Authority Slaps 3AC Founder With a 9-Year Finance Ban

MAS Impose Ban on 3AC Founders

According to a statement released by the Monetary Authority of Singapore (MAS) on Thursday, founders of the failed cryptocurrency hedge fund Three Arrows Capital (3AC) are not allowed to participate in any financial activity in the country for the next nine years.

The founders, Kyle Davies, who served as the hedge fund’s director and Su Zhu, who was the Company CEO, are accused of violating various rules stated in the Securities and Futures Regulations and Securities and Futures Act 2001.

As per the MAS statement, Zhu and Davies failed to inform the regulator of the appointment of Cheong Jun Yoong Arthur, who acted as the 3AC manager for more than a year between September 2020 and October 2021.

3AC Founders Neglected Risk Management Measures

Moreover, MAS accused the two founders of not employing proper risk management measures to minimize the risks involved in crypto trading. The regulator’s representative, Loo Siew, Said in the statement that Zhu and Davies’ failure to adopt risk control measures was against the regulatory requirements established by MAS.

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Three Arrow Capital was among the crypto companies that filed for bankruptcy during last year’s crypto winter, caused by the collapse of the Terra ecosystem. At the time, the hedge lost over $190 million after its trading positions got liquidated due to the firm’s inability to respond to the margin calls.

Davies and Zhu’s New Venture

Although the 3AC founders are blocked from starting a financial firm in Singapore, they recently launched their new crypto business in Dubai. It is a trading platform known as Open Exchange, which focuses on claims against failed crypto companies and derivatives.

Davies and Zhu have already crossed paths with Dubai’s regulators. In May, the city’s Virtual Assets Regulatory Authority delivered a written reprimand to the two founders, accusing them of running their trading platform without obtaining a license.

Finally, 3AC’s court-appointed liquidators, Teneo, are still demanding $1.2 billion from Davies and Zhu. As of August 2023, they had only secured $35 million held in the crypto hedge’s bank accounts, various NFTs and a yacht estimated to be worth $30 million. As per a Bloomberg report, Teneo are now looking to seize Davies and Zhu’s personal assets.

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Michael Varney
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Michael Varney

Michael Varney, a distinguished name in crypto journalism, offers deep insights into the world of blockchain. Merging meticulous research with eloquent prose, Michael's articles decode the complexities of digital currencies, establishing him as an indispensable source for those keen on understanding the evolving crypto landscape.

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