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Singapore's banking watchdog slaps Three Arrows Capital

Three Arrows Capital was penalized by the Monetary Authority of Singapore (MAS) for submitting incorrect information and exceeding its AuM threshold.

Three Arrows Capital (3AC) employees were penalized by Singapore's financial authorities for giving incorrect information regarding their operations in the nation.

The Monetary Authority of Singapore (MAS) said that 3AC surpassed the maximum number of assets under management (AuM) that a Singapore investment fund can have. According to an official MAS statement, 3AC has been in violation of its laws since at least July 2020.

3AC was permitted to handle no more than $250 million in assets from 30 qualifying investors as a registered fund management firm (RFMC). However, between July 2020 and September 2020, as well as November 2020 and August 2021, the corporation surpassed its permitted AuM limit.

3AC renewed its RFMC status from 2013 in September 2021 and transferred the fund to an offshore firm in the British Virgin Islands. In February 2021, the business handled a portion of the fund's assets but informed MAS that it planned to terminate all fund management operations in Singapore on May 6, 2022.

Singapore's regulators argue that 3AC's representations about shifting the fund to an offshore business were "false and deceptive."

“This representation was misleading as 3AC and the offshore entity shared a common shareholder, Mr. Su Zhu, who is also a director of 3AC.”

The corporation faces no legal consequences as a result of MAS's letter of disapproval. Recent revelations, however, have prompted MAS to initiate a more thorough inquiry into whether the fund violated additional regulations. If the inquiry is successful, MAS may file a lawsuit against 3AC and seek penalties and other damages.

The censure comes at a difficult moment for Three Arrows Capital, since a British Virgin Islands court has ordered the fund to be liquidated. Voyager Digital issued a default note to 3AC earlier this week after the fund failed to repay a $660 million loan.

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