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Singapore Regulators Ban Three Arrows Capital Founders for 9 Years

The founders of the now-defunct crypto hedge fund Three Arrows Capital have been handed a nine-year ban by the Monetary Authority of Singapore (MAS) for violating the Securities and Futures Act (SFA) and the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR). The consequences are serious and they are barred from engaging in regulated financial activities for a specific period of time. This also means they cannot hold managerial positions, act as directors, or become major shareholders in any capital market services company under Singapore’s Securities and Futures Act. 

Zhu and Davies Are Banned for 9 Years, Possible Implications

According to the Bloomberg report, the MAS accused Three Arrows Capital has accused them of providing false info and not following the regulatory guidelines. According to Loo Siew Yee, assistant managing director for policy, payments & financial crime at MAS, expressed strong disapproval, stating that they take a serious view of Zhu and Davies’ blatant disregard for regulatory requirements and their neglect of their directorial duties.

Looking at the past horrors, the hedge fund, Three Arrows, collapsed in 2022 due to misguided leveraged crypto investments. This significantly contributed to a massive $2 trillion drop in the digital asset market, causing a wave of further collapses and bankruptcies in the sector. 

It is being noted that further the liquidation process Three Arrows’ Zhu and Davies of not fully cooperate with their investigation. The agency is trying to recover $1.3 billion from the two, which represents the losses incurred in the months leading up to the fund’s collapse.

In his previous statement, Zhu claimed that their sincere attempts to cooperate with the liquidators were met with resistance. In email correspondence submitted to a New York bankruptcy court, counsel to Davies and Zhu stated that the court orders obtained by the liquidators were without a valid basis. 

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