The two founders of former Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) have been barred from financial activity in the island city state for nine years, according to a press release by the Monetary Authority of Singapore (MAS). 

The founders, former CEO Su Zhu and chair/director Kyle Davies, are accused of contraventions of the Securities and Futures Act 2001 (SFA) and Securities and Futures Regulations (SFR).  

The prohibition order states the pair failed to inform the MAS “within the required timeframe” of the employment of a Mr Cheong Jun Yoong Arthur, who served as a hedge fund manager between August 2020 and September 2021. 

Furthermore, the bosses appear to have given authorities false information—stating to the MAS that Cheong Jun Yoon Arthur was not undertaking any regulated activities with them. 


The prohibition order also states that 3AC had no appropriate risk management framework for the prevention, detection and mitigation of risks related to cryptocurrency trading. 

3AC was the first major cryptocurrency firm to go bankrupt during 2022’s “crypto winter,” when contagion from the rapid depegging of Terra’s dollar-pegged UST and the failure of the LUNA ecosystem that underpinned it led to the bankruptcy of many exposed crypto companies, including the infamous FTX. 

In a statement, MAS representative Loo Siew Lee said: “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.”

Zhu and Davies' Open Exchange

Zhu and Davies are effectively prohibited from opening a financial business in Singapore, but over in Dubai they’ve launched a new venture, the Open Exchange (OPNX), a platform specializing in trading derivatives and claims against bankrupt cryptocurrency entities.


In May, the two founders were among five people issued with a written reprimand by Dubai’s Virtual Assets Regulatory Authority (VARA) in relation to OPNX. The site, which went live last month, had been offering virtual asset exchange services without securing any regulatory licenses.

“Following the launch, and with the continued lack of satisfactory remedial action by the responsible parties, VARA is continuing to actively monitor the situation and investigate OPNX's activity to assess further corrective measures that may be required to protect the market,” the regulator said in a statement at the time.

Finally, back to 3AC: in late June, the hedge fund’s court-appointed liquidators, Teneo, claimed it was owed $1.3 billion from the founders for losses incurred in the final couple of months before the fund’s collapse in July 2022 after it took on “significant leverage.”

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