The Monetary Authority of Singapore (MAS) has issued a nine-year ban to founders Kyle Davies and Su Zhu of Three Arrows Capital for alleged violations of the country's securities laws. The founders are prohibited from regulated activities and managing, acting as directors, or holding substantial shares in any capital market services business in Singapore. MAS stated that the founders provided misleading information and failed to comply with regulatory requirements. Three Arrows Capital faced bankruptcy and substantial losses after the collapse of the Terra ecosystem. The founders have launched a new crypto exchange and venture capital fund.
Our analysis of the situation
In a stunning turn of events, the founders of Three Arrows Capital, Kyle Davies and Su Zhu, have found themselves firmly in the crosshairs of the Monetary Authority of Singapore (MAS). The central bank has come out with guns blazing, issuing a nine-year ban to these crypto wizards. Talk about a bad day at the office!
According to MAS, Davies and Zhu have been banned from engaging in any regulated activities in Singapore effective September 13. Not only that, they are also prohibited from managing, being directors of, or holding substantial shares in any capital market services business operating in the country. Ouch, that's gotta sting!
MAS has revealed that these sanctions are the result of its deeper investigation into the notorious bankrupt company, 3AC. It seems that Davies and Zhu forgot to inform the central bank about 3AC's new business representative and also supplied misleading information. Tsk tsk, gentlemen.
Loo Siew Yee, the assistant managing director of policy, payments, and financial crime at MAS, didn't mince her words when expressing the bank's disappointment, stating, "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." Looks like they've landed themselves in some hot water.
This isn't the first time Three Arrows Capital has found itself in the spotlight. Last year, just before filing for bankruptcy, the hedge fund was officially reprimanded by MAS for various violations. It seems they were quite the rule-breakers, providing false information to regulators, failing to report changes in directorship, and even surpassing the legally allowed assets under management. Not exactly a case of flying under the radar, huh?
The collapse of 3AC took place during the crypto market crash, thanks to the unfortunate collapse of the Terra ecosystem. With leveraged crypto positions and a string of loan defaults, 3AC faced substantial losses and reportedly owes creditors a staggering $3.5 billion. Yikes!
But wait, the story doesn't end there. In a classic case of "every cloud has a silver lining," the founders have embarked on a new adventure. They've launched OPNX, a crypto exchange that allows users to trade claims of bankrupt crypto companies. A bold move, indeed. Additionally, their new VC fund aims to invest in the very same crypto exchange, OPNX.next. It seems that setbacks can't keep these crypto aficionados down for long.
While the ban may be a dark cloud hanging over their heads, we can't deny that Kyle Davies and Su Zhu are no strangers to bouncing back. With their eyes set on bigger and better things, we'll be keeping a close eye on the future of these crypto mavericks.
And that, dear readers, is the tale of the not-so-lucky arrows in the fast-paced world of crypto. Let's hope they can find redemption and hit their targets with a little more accuracy next time.
Disclaimer: This article is intended for informational purposes only. The author does not have any association with Three Arrows Capital or the Monetary Authority of Singapore (MAS).
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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Please, behave!