Singapore’s authorities imposed a 9-year trading ban on founders of Three Arrows Capital, marking a significant regulatory action in the financial industry.
This prohibition effectively restricts their involvement in Singapore’s regulated financial services industry, encompassing any participation in regulated activities and assuming pivotal roles such as managerial positions, directorships, or substantial shareholding positions in capital market services firms.
The official announcement from MAS outlined these stringent restrictions.
MAS’s decisive action is a result of an earlier, extensive investigation into Three Arrows Capital. In June 2022, MAS reprimanded the fund for disseminating false information to the public.
Three Arrows Capital
The investigation also raised concerns about Zhu and Davies’ involvement in Three Arrows entities located in Singapore and the British Virgin Islands. Notably, Three Arrows Capital had failed to notify MAS about the appointment of a new fund manager and falsely represented that this manager was not engaged in regulated activities. Furthermore, the fund neglected to establish a robust risk management framework, which is a critical aspect of regulatory compliance.
Loo Siew Yee, Assistant Managing Director of Policy, Payments & Financial Crime, stressed the significance of senior management in fund management firms implementing robust risk management measures to ensure the protection of investors’ interests.
She emphasized MAS’s stern view on Zhu and Davie’s blatant disregard for regulatory requirements and their neglect of directorial responsibilities, affirming that MAS will take firm measures against senior managers engaging in such misconduct.
In a parallel development, Zhu and Davie’s recent venture, the crypto bankruptcy claims exchange called OPNX, faced regulatory scrutiny from the Dubai Virtual Assets Regulatory Authority (VARA).
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In August, VARA imposed a substantial fine of nearly $2.8 million on OPNX. However, as of September 14, this hefty fine remains unpaid, as indicated by an available copy of the notice. This adds to the regulatory challenges faced by Zhu and Davies in the cryptocurrency sector.