The Monetary Authority of Singapore has reprimanded Singapore-based crypto hedge fund Three Arrows Capital (3AC) for providing false information and for breaching fund management industry licensing rules.
The fund is in the news recently for being put under liquidation in British Virgin Islands after it defaulted on payments.
In a June 30 announcement, MAS says that 3AC exceeded the amount of assets under management allowed for a registered fund management company (RFMC).
Further investigations are on-going.
“In light of recent developments which call into question the solvency of the fund managed by 3AC, MAS is assessing if there were further breaches by 3AC of MAS’ regulations,” says MAS.
Under MAS rules, so-called RMFCs can manage funds on behalf of not more than 30 qualified investors and have a total AUM capped at $250 million. Fund management firms holding other license classes do not face similar restrictions.
MAS says that 3AC, which obtained its RFMC status back in August 2013, breached the AUM threshold of $250 million for a “prolonged” period between July 2020 and September 2020 and between November 2020 and August 2021. MAS did not specify how large the excess AUM was.
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MAS says 3AC provided false information as well, when it transferred the management of its fund to an offshore entity in the British Virgin Islands on Sept 1 2021.
3AC had told MAS there’s no links between the two entities. In fact, there’s a common shareholder: Su Zhu, co-founder, director, CEO and CIO of 3AC.
Also, 3AC did not notify MAS of changes to directorships and shareholdings involving Su and Kyle Livingston Davies, who is 3AC’s co-founder and chairman.
