Singapore – In a recent directive from the Monetary Authority of Singapore (MAS), Three Arrows Capital (3AC) co-founders, Kyle Davies and Su Zhu, find themselves facing a nine-year prohibition period from holding prominent positions in financial firms based in Singapore due to alleged transgressions against the country’s securities laws.
Background of the Ban
On September 14, the MAS released a statement detailing the prohibition orders against the two individuals, effective from September 13. The regulatory clampdown bars Zhu and Davies from participating in any regulated activities and holding substantial shares or directorial positions in any capital market services enterprises in the country.
MAS undertook further scrutiny into 3AC and its co-founders, unearthing additional securities law violations, which accelerated the decision to impose the ban. The central bank highlighted that Davies and Su failed to disclose the employment of a new business representative, provided incorrect information to the authorities, and overlooked the necessity for a proper risk management infrastructure.
Loo Siew Yee, the assistant managing director of policy, payments, and financial crime at MAS, pronounced deep concerns over the flagrant non-compliance with regulatory mandates by Zhu and Davies, emphasizing that MAS would not hesitate to expel senior executives exhibiting such misconduct.
The Fall of 3AC
3AC found itself grappling with financial turmoil, with creditors asserting that the firm owes them around $3.5 billion. The firm’s financial pitfalls exacerbated amid the crypto market crash instigated by the Terra ecosystem meltdown last year, which laid bare its leveraged crypto positions to massive loan defaults. Liquidators are now rallying to recuperate approximately $1.3 billion from the embattled co-founders, associated with debts accumulated during the period of insolvency.
As the industry keenly observes the unfolding events, the stringent action by the MAS stands as a testament to its unwavering commitment to uphold the regulatory norms and foster a secure and compliant financial ecosystem in Singapore. The repercussions for 3AC and its founders remain to be seen as they venture into a future overshadowed by regulatory constraints and financial recoveries.
Note to editors
For more updates on this developing story, stay tuned to our daily coverage. Reach out to the MAS press office for official statements and detailed insights on the regulatory developments.
The recent actions of Singapore’s central bank are reflective of its steadfast approach in maintaining the sanctity of its financial landscape. It remains to be seen how the ban will affect the future endeavors of Kyle Davies and Su Zhu, and how the legal proceedings involving the liquidation of 3AC’s assets will unfold.