The Monetary Authority of Singapore (MAS) has issued nine-year prohibition orders against Three Arrows Capital (3AC) founders Zhu Su and Kyle Davies, banning them from regulated financial activities in the country. The orders come after a MAS investigation that reportedly uncovered multiple violations of securities laws by the now-defunct crypto hedge fund and its directors.
MAS Slaps 9-Year Ban on Three Arrows Capital Founders Over Violations
The prohibition orders prevent Zhu and Davies from performing any regulated activity or taking part in managing or becoming a major shareholder of any Singapore capital market services firm. The notice disclosed that the bans took effect on September 13.
MAS first reprimanded 3AC in June for providing false information and exceeding assets under management limits. Further investigation found 3AC failed to notify regulators about hiring a portfolio manager, gave false information about the manager’s role, and lacked an adequate risk management framework for its cryptocurrency investments.
As directors of 3AC, Zhu and Davies were primarily responsible for ensuring compliance with regulations, MAS detailed. “MAS’ investigation showed that they had failed to discharge their duties and were responsible for TACPL’s breaches,” the entity wrote in the press release.
MAS Assistant Managing Director Loo Siew Yee stated: “Senior management of fund managers are required to implement robust risk management measures to protect the interest of investors. MAS takes a serious view of Mr. Zhu’s and Mr. Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties.”
The prohibition orders represent the latest fallout from 3AC’s collapse last year. The prominent crypto hedge fund filed for bankruptcy in July 2022 after amassing over $3 billion in liabilities and losing nearly all its assets. Regulators in multiple jurisdictions have cracked down on 3AC and its founders for alleged misconduct.
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