REGULATION

MAS Singapore: Nine-year ban! Three Arrows Capital's Zhu Su and Kyle Davies prohibited from participating in any regulated company

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MAS Singapore: Nine-year ban! Three Arrows Capital

The Monetary Authority of Singapore (MAS) announced on 9/14 that it has issued a nine-year prohibition order against Three Arrows Capital, 3AC's Zhu Su, and Kyle Livingston Davies, prohibiting them from engaging in any activities regulated by MAS. Source

Singapore's Nine-Year Ban: No Participation Allowed!

The Monetary Authority of Singapore (MAS) has announced a ban on Zhu Su and Kyle Livingston Davies from engaging in any regulated activities, including managing, acting as directors, or becoming major shareholders of any capital market services company under the Singapore Securities and Futures Act (SFA). The ban will take effect on September 13, 2023.

Currently, Zhu Su and Kyle Livingston Davies have set up a debt trading platform.

Reasons for Singapore's Ban on Zhu Su and Kyle Davies

Well-known figures Zhu Su and Kyle Livingston Davies, former CEO and Chairman of the board of 3AC Capital, were ultimately bankrupted due to the LUNA storm, affecting multiple companies. Background: Founder of 3AC Capital gives interviews: Regrets fund collapse, heading to Dubai, clarifies defamation.

The MAS had issued a reprimand to 3AC Capital in June 2022 for:

  • Providing false information to MAS
  • Failing to notify MAS of changes in the directorship and shareholding of the two individuals
  • Exceeding the asset management threshold allowed for a registered fund management company

After investigation, MAS found the following violations:

  • Failure to notify MAS of the employment of a representative: Between August 2020 and September 2021, 3AC Capital employed Cheong Jun Yoong Arthur as a portfolio manager to carry out fund management activities on behalf of 3AC Capital. 3AC Capital failed to notify MAS within the stipulated time frame about Cheong's employment, in violation of the Securities and Futures Act regulations.
  • Providing false information to MAS: In January 2022, 3AC Capital falsely stated to MAS that they did not notify MAS about Cheong's employment because he was not engaged in any regulated activities. In reality, Mr. Cheong conducted fund management activities on behalf of 3AC Capital from August 2020 to September 2021.
  • Failure to establish an adequate risk management framework: 3AC Capital did not establish an appropriate risk management framework to identify, monitor, and address the risks associated with the cryptocurrency and digital asset investments managed by them.

As directors of 3AC Capital, Zhu Su and Kyle Livingston Davies were primarily responsible for ensuring 3AC Capital complied with the regulatory requirements of the Singapore Securities and Futures Act. MAS's investigation revealed that they failed to fulfill their duties and were responsible for 3AC Capital's regulatory breaches.

Singapore's MAS: Enforcing to Remove Wrongdoers

Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS, stated: "Senior management of fund managers must take robust risk management measures to protect investors' interests. MAS takes a serious view of the blatant disregard by Zhu Su and Kyle Livingston Davies for MAS's regulatory requirements and their neglect of directorial responsibilities. MAS will take action to remove senior management personnel who commit such misconduct."