The Financial Authority of Singapore (MAS) imposed a nine-year ban on the founders of the now-defunct cryptocurrency hedge fund Three Arrows Capital for breaking the Securities and Futures Act (SFA) and the Securities and Futures (Licencing and Conduct of Enterprise) Laws (SFR). Because of the important findings, they are temporarily prohibited from taking part in regulated financial activities. Additionally, this implies that under Singapore’s Securities and Futures Act, they are not permitted to take managerial roles, serve as administrators, or become majority owners in any company that provides capital market services.
9-Year Ban on Zhu and Davies Could Have Possible Consequences
According to a Bloomberg article, the MAS charged Three Arrows Capital with providing false information and disregarding regulatory advice. According to Lavatory Siew Yee, assistant managing director for policy, finances, and financial crime at MAS, voiced strong dissatisfaction and stated that they take Zhu and Davies’ apparent disdain for regulatory requirements and the negligence of their directorship duties seriously.
To add to the horrors of the past, the collapse of the hedge firm Three Arrows in 2022 was caused by foolish leveraged crypto investments. This significantly influenced a large $2 trillion decline in the market for digital assets, resulting in a wave of new collapses and bankruptcies in the industry.
It is well known that Zhu and Davies of Three Arrows did not fully participate in their inquiry during the liquidation process. The corporation is suing the two for $1.3 billion, which it claims to be due from them for losses experienced in the months leading up to the fund’s demise.
Zhu had already stated that despite their best efforts to work with the liquidators, they had encountered opposition. Davies and Zhu’s solicitors claimed that the court orders obtained by the liquidators had no legal basis in email correspondence that was submitted to a New York chapter courtroom.