Three Arrows Capital provided false information; Monetary Authority of Singapore stated
Singapore’s Central Bank and Financial regulatory body, The Monetary Authority of Singapore (MAS), issued notice to Three Arrows Capital for providing false information. The notice also mentions that the firm is currently managing more assets under management than the threshold.
MAS Reprimands Crypto Hedge Fund Three Arrows Capital
MAS reprimanded Three Arrows Capital Pte. Ltd (TAC) for providing false information in a notice published on 30 June. According to MAS, TAC has exceeded the required threshold for assets under management (AUM).
TAC has a registered fund management company status (RFMC), obtained in 2013 in Singapore. According to the RFMC status, TAC can carry business with a maximum of 30 investors and the AUM threshold is $250 million. However, TAC exceeded the AUM limit on two different occasions between July and September 2020, and between November 2020 and August 2021.
According to MAS, TAC novated the management of funds to an offshore entity in British Virgin Islands. Although they resumed management of a portion of fund in February 2022, they only notified MAS on 29 April 2022 of the decision to cease fund management from 6 May 2022.
However, the reprimand from MAS is for violations before this April notification. MAS discovered several violations as per the Securities and Futures Act 2001 (SFA) and Securities and Futures (Licensing & Conduct of Business) Regulations (SFR). The listed violations as per the notice are –
- Failure to ensure that information provided to MAS is not false or misleading
- Failure to notify MAS of changes to directorships and shareholdings
- Prolonged breach of the AUM threshold
MAS is checking for any further contraventions by TAC. The solvency of funds managed by TAC is under further scrutiny. The notice came on the heels of a British Virgin Island court order to liquidate the assets.
The plunge in the crypto markets especially after Terra collapse led to the downfall of many major Institutional investors. Ethereum lost more than 50% of its market price in a week. TAC, a previous market leader in crypto funds management, suffered hugely in the market crash.
Singapore tightening regulations on Crypto
Singapore Regulators will closely scrutinize local crypto companies from now on. Earlier Singapore-listed companies were not regulated for Anti-money laundering and countering the financing of terrorism. However, this would not be the case now. Singapore Parliament passed a law in April that will tighten the rules for crypto providers.
While Singapore welcomes crypto technology-based companies, it has also launched a framework for regulating the industry. According to the Financial Times, MAS will be ‘brutal and unrelentingly hard’ on bad behaviour in the crypto industry.
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