Three Arrows Founders Face Nine-Year Trading Suspension in Singapore

Police & Regulations
Sep 14, 2023 at 03:07 pm

The founders of Three Arrows Capital have been hit with a nine-year prohibition by MAS, effectively barring them from managing, directing, or holding shares in any registered capital markets services firm in Singapore. The nation's financial regulatory authority has taken resolute action against the founders of Three Arrows Capital, effectively disqualifying them from involvement in the regulated financial services sector within the country.

As detailed in the official release, Su Zhu and Kyle Davies are now forbidden from participating in any regulated activities. They are also restricted from engaging in the management, serving as directors, or becoming significant shareholders of any capital market services firm.

MAS's implementation of this prohibition order was prompted by their comprehensive investigation into Three Arrows Capital. The fund had received reprimands from the regulatory body in June 2022 for disseminating false information to the public. The investigation also scrutinized the specific roles played by Zhu and Davies in Three Arrows' entities based in Singapore and the British Virgin Islands.

MAS explicitly pointed out that Three Arrows Capital had failed to inform them about the appointment of a new fund manager. Additionally, the fund provided misleading information to MAS, asserting that this manager was not engaged in regulated activities. Moreover, Three Arrows Capital had failed to establish a suitable risk management framework.

Loo Siew Yee, as the Assistant Managing Director overseeing Policy, Payments, and Financial Crime, emphasized the pivotal role held by senior management within fund management companies. They play a crucial part in establishing robust risk management protocols, a critical aspect in safeguarding investors' interests. She underscored that MAS regards the apparent disregard shown by Mr. Zhu and Mr. Davies towards regulatory standards, along with their failure in fulfilling their directorial duties, with the highest level of gravity. MAS is unwavering in its commitment to take decisive measures against senior managers involved in such misconduct.

In a separate development, Zhu and Davies' most recent venture, the crypto bankruptcy claims exchange OPNX, incurred a substantial fine of nearly $2.8 million from Dubai's Virtual Assets Regulatory Authority (VARA) in August.

As of September 14, this fine remains unpaid, according to a notice retrieved. It is noteworthy that OPNX is registered in Seychelles.

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