Following the collapse of Three Arrows Capital, co-founders Zhu Su and Kyle Davies dropped off the map.
Since then, they’ve occasionally resurfaced on X to make oblivious and out-of-place posts excusing them of any wrongdoing and to announce the launch of their new business ventures, namely the exchange platform OPNX and a new hedge fund named 3AC Ventures.
New Ventures Also Under Fire
OPNX, which is headquartered in Dubai, has since been fined by local financial authority VARA.
True to form, the dynamic duo had not yet paid the fine issued to OPNX by mid-August, and there is no indication that they have done so yet. However, they did pay fines addressed to themselves personally, which were issued as a result of the same investigation.
Meanwhile, Singaporean authorities have issued a blanket ban on any financial or investment businesses started by the pair on local soil for the next nine years.
False Information, Improper Risk Management
Ms Loo Siew Yee, a spokesperson for the MAS, declared the penalty to be the result of improper risk management and dereliction of duty on behalf of Su and Davies.
“Senior management of fund managers are required to implement robust risk management measures to protect the interest of investors. MAS takes a serious view of Mr Zhu’s and Mr Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct.”
Although 3AC was long suspected of simply making risky financial decisions, it turns out that – according to the Monetary Authority of Singapore (MAS) – no risk management framework was set in place at the company at all.
“3AC did not have in place a risk management framework to identify, monitor, and address risks associated with the cryptocurrency and digital asset investments under its management.”
Further offenses mentioned in the MAS’ press release are the failure to notify and the subsequent provision of false information regarding a hedge fund manager named Cheong Jun Yoon Arthur.
According to MAS, Arthur was a hedge fund manager at 3AC between August 2020 and September 2021. However, the financial authority was not notified of the hire during the required timeframe. When questioned about the employee in January of 2022, 3AC stated that he did not carry out any regulated activities at the hedge fund.
The MAS determined this information to be false and indicated that Arthur had indeed been a fund manager at 3AC.
The ban prohibits the pair from “performing any regulated activity and from taking part in the management of, acting as a director of or becoming a substantial shareholder, of any capital market services firm.”
The exact whereabouts of the disgraced hedge fund managers are still unknown, although they are suspected to be in Dubai.
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