Key takeaways:
- Singapore’s central bank has given Kyle Davies and Zhu Su nine-year restriction orders due to alleged violations of the nation’s securities regulations.
- In its decision to bar the two, MAS stated that after conducting more investigations into the insolvent 3AC and its co-founders, it discovered other securities law infractions.
Singapore’s central bank has given Kyle Davies and Zhu Su nine-year restriction orders due to alleged violations of the nation’s securities regulations at their jointly created cryptocurrency hedge firm, Three Arrows Capital (3AC).
Su and Davies would not be permitted to engage in any regulated activities during the prohibition period beginning September 13, according to a statement released by the Monetary Authority of Singapore (MAS) on September 14.
Additionally, they won’t be allowed to run any Singaporean businesses providing capital market services, serve as directors, or possess a significant stake in them.
In its decision to bar the two, MAS stated that after conducting more investigations into the insolvent 3AC and its co-founders, it discovered other securities law infractions.
According to MAS, Su and Davies failed to inform the central bank that 3AC hired a new business representative, misled the regulator, and did not put an effective risk management system in place.
Loo Siew Yee, the assistant managing director of policy, payments, and financial crime at MAS, claims that the company takes seriously the way Zhu and Davies openly ignored “MAS’ regulatory requirements and dereliction of their directors’ duties.” She asserted:
“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,”
In June, MAS censured the hedge fund for giving it misleading information, failing to inform the watchdog about Zhu and Davies’ changes to their directorships, and exceeding the lawful assets under the management level. This came amid widely reported insolvency and a day before 3AC filed for bankruptcy.
Due to its leveraged crypto positions, 3AC was exposed to billions in loan defaults during last year’s crypto market catastrophe that was brought on by the collapse of the Terra ecosystem.
Liquidators are attempting to recoup almost $1.3 billion from Zhu and Davies, who are accused of incurring the debt when the company was already insolvent, according to creditors who assert that 3AC owes up to $3.5 billion.
OPNX, a cryptocurrency bankruptcy claims exchange run by Zhu and Davies, was fined roughly $2.8 million by Dubai’s Virtual Assets Regulatory Authority (VARA) in August.
