Future of crypto in Singapore uncertain after collapse of 3AC 

Cryptocurrency fund Three Arrows Capital Pte Ltd (3AC) recently collapsed amid the downturn of digital currency around the world, and the bad news is that it may drag others along with it.

3AC, one of the most well-known crypto hedge funds around the globe, had managed around $10 billion in assets even until March of this year.

Today, however, the company is headed for bankruptcy and is unable to pay its creditors.

Moreover, 3AC’s founders, Zhu Su and Kyle Davies have reportedly gone missing, with the legal representatives of 3AC’s creditors saying that the whereabouts of the founders are “currently unknown.”

Messrs Zhu and Davies have also reportedly not cooperated with the liquidation process “in any meaningful manner.”

In Zhu’s most recent tweet, dated July 12, he wrote “Sadly, our good faith to cooperate with the Liquidators was met with baiting. Hope that they did exercise good faith wrt the StarkWare token warrants.”

Sadly, our good faith to cooperate with the Liquidators was met with baiting. Hope that they did exercise good faith wrt the StarkWare token warrants. pic.twitter.com/CF73xI8r6n

— Zhu Su 🔺 (@zhusu) July 12, 2022

Industry experts now expect that the Monetary Authority of Singapore (MAS) will tighten restrictions.

“After recent events it appears likely that the MAS will get tougher on crypto and digital assets,” said Hoi Tak Leung, a senior technology sector lawyer at Ashurst LLP, quoted as saying in a Reuters article.

In 2021, investment in the country’s crypto and blockchain companies rose to US$1.48 billion, ten times higher than the previous year.

But MAS has been cautious, granting only “a handful” of new crypto payments licenses to the over 150 crypto companies that applied.

3AC’s fall will make things even more difficult. A court in the British Virgin Islands put the company under liquidation on June 27 due to the company’s failure to pay its creditors.

Its liquidation is being handled by Teneo, an advisory and consulting firm.

3AC’s collapse has left other crypto companies in a world of pain. Due to unpaid loans, Blockchain.com is said to be facing a US$270 million loss, while Voyager Digital has filed for bankruptcy after 3AC could not pay back around US$670 million. Other companies facing losses are Genesis, BlockFi, BitMEX and FTX. 

“We will continue to see crypto markets globally being impacted by the contagion effect of recent market events, including in Singapore, a major cryptocurrency hub,” Reuters quoted Rose Kehoe, managing director in Kroll’s restructuring practice in Singapore, as saying. /TISG

Co-founder crypto fund 3AC is selling S$48.8 million GCB even as liquidators try to seize his assets