In a surprising turn of events, the Monetary Authority of Singapore (MAS) has imposed a nine-year ban by Singapore Regulator on the founders of the now-defunct cryptocurrency hedge fund, Three Arrows Capital (3AC). This punitive action comes on the heels of a significant fine levied against them by Dubai authorities.
The Regulatory Crackdown
The MAS has made a public announcement stating that Kyle Davies and Zhu Su, the founders of 3AC, have been banned for a period of nine years. The ban is in response to their violation of the Securities and Futures Act (SFA) of 2001. According to the prohibition orders that came into effect on 13th September 2023, Davies and Zhu are restricted from performing any regulated activity. Additionally, they are also prohibited from participating in the management of, acting as a director of, or becoming a substantial shareholder in any capital market services firm under the SFA.
Violations Committed
The regulatory body has stated that from August 2020 to January 2022, Davies and Zhu failed to notify the MAS about the employment of their portfolio manager. They are also accused of providing false information to the MAS and failing to implement appropriate risk management protocols. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) of MAS, expressed the regulator’s serious concern over the founders’ blatant disregard for MAS’ regulatory requirements and their failure to fulfill their directorial duties.
Previous Offenses
Prior to the nine-year ban by Singapore Regulator, Davies and Zhu were also slapped with a $2.8 million fine by the Virtual Assets Regulatory Authority (VARA) of Dubai for regulatory violations. This double whammy of punitive measures underscores the seriousness of their infractions and the need for robust regulatory oversight in the volatile world of cryptocurrencies.
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