3AC co-founders barred from business activity in Singapore

The Monetary Authority of Singapore (MAS) for nine years banned the founders of the bankrupt hedge fund Three Arrows Capital (3AC) Kyle Davies and Su Zhu from participating in regulated business activities in the country.

According to the regulator, Davies and Zhu violated a number of securities and futures laws and regulations.

The co-founders of 3AC are also barred from taking part in the management of companies, from serving as directors, from providing financial services, or from becoming major shareholders on capital markets.

During a detailed MAS investigation, additional violations by the hedge fund and its leaders were identified for the period from August 2020 to January 2022. In particular, they related to the failure to report to the regulator the appointment of a new portfolio manager, and the absence of a risk-management system.

“MAS takes a serious view of Zhu and Davies’ flagrant disregard of regulatory requirements and their failure to discharge their duties as directors. The MAS will take steps to remove senior managers who commit such misdeeds,” the order states.

In April, the co-founders of the hedge fund announced the launch of a new crypto exchange — OPNX.

Leslie Lamb, the wife of former CoinFLEX chief executive Mark Lamb, took the role of CEO. She later criticised investors who had distanced themselves from the company.

In July Davies pledged to donate potential proceeds from the new platform to 3AC’s creditors in the name of “good karma”.

Earlier in August, it emerged there was a hearing over disputes between DeFiance Capital and Teneo, which represents the interests of 3AC’s liquidators, regarding the status of assets worth $141 million.