On Thursday, beleaguered crypto hedge fund Three Arrows Capital got a sharp warning from Singaporean regulators, who accused the crypto firm of supplying “false information” to the city-state about the way it handled certain parts of its business.
The Monetary Authority of Singapore says the firm, which is technically based in Singapore, provided “misleading” information about its move to the British Virgin Islands last year.
This week, the company was forced by court order to liquidate in the British Virgin Islands, after facing a financial crisis in the wake of the collapse of algorithmic stablecoin TerraUSD and its failure to meet margin calls.
The Singaporean regulator also rebuked the crypto firm for failing to apprise MAS of changes to its directors or shareholders in a timely manner.
“In light of recent developments which call into question the solvency of the fund … MAS is assessing if there were further breaches,” MAS said.
Earlier this month, the crypto firm was lambasted as an “old-fashioned Madoff-style Ponzi scheme” by research firm FSInsight and the crypto broker Voyager Digital sent a default notice to Three Arrows Capital on a loan of more than $665 million.
“[They] recklessly borrow from just about every institutional lender in the business,” said Sean Farrell, head of digital asset strategy at FSInsight.
The liquidation process is being handled by The restructuring firm Teneo is currently identifying the value of 3AC’s assets. It plans to launch a website soon to assist creditors wishing to recoup their losses.