On June 30, the Monetary Authority of Singapore (MAS) issued an official reprimand to the cryptocurrency-focused hedge fund company, Three Arrows Capital Pte. Ltd. (TAC). In a statement posted on its website, MAS said TAC has given misleading information to MAS and is exceeding the assets under management (AUM) level permitted for a registered fund management company (RFMC).
“Three Arrows, based in Singapore, obtained registered fund management company (RFMC) status in August 2013, allowing it to conduct fund management business with no more than 30 qualified investors and manage assets worth no more than $250 million,” according to a statement from the Monetary Authority of Singapore (MAS).
The regulator added, “Three Arrows novated the management of the only fund it managed to an offshore entity in the British Virgin Islands on 1 September 2021. While it resumed management of a portion of the fund’s assets in February 2022, the company notified MAS on 29 April 2022 of its plans to cease fund management activity in Singapore with effect from 6 May.”
Three Arrows informed MAS that it has novated the management of its fund to an unrelated offshore entity effective September 1, 2021. This representation was deceptive since Three Arrows and the offshore entity had the same shareholder, Su Zhu, who is also a director of the hedge fund.
The company failed to notify MAS of changes in the directorships and shareholdings of its directors, Su Zhu and Kyle Livingston Davies, within the required timeframe. The regulator also said that Three Arrows had exceeded its permissible assets under the management limit of $250 million between July 2020 and September 2020, as well as between November 2020 and August 2021.