Singapore’s Monetary Authority Finally Notices Three Arrows’ Capital AUM Discrepancy

In early 2021 Three Arrows Capital reported a $1.2 billion position in the Grayscale Bitcoin Trust (GBTC), evenly split between its entities in Singapore and the British Virgin Islands.
But there’s a slight problem.
In Singapore, Three Arrows Capital is only registered to manage assets under $250 million (US$179.9 million) – well under what its position in GBTC is worth.
There was likely a lot of leverage involved as Three Arrows bought into GBTC as part of a premium harvesting play. Super leverage that, according to the opinion of one analyst, helped cause the current crypto winter when the whole thing collapsed.
Regardless, the Monetary Authority of Singapore isn’t happy. Late Thursday, MAS issued a public reprimand of Three Arrows Capital for providing “misleading information to the regulator and exceeding the threshold set for assets under management.”
Questions should have been asked by the media around the time that Three Arrows filed its GBTC position with the SEC about how the firm was doing it. Crypto and business publications should have been bolder because the fund’s management team owed the industry an explanation of how this arrangement worked.
We’ll probably be hearing more from MAS about Three Arrows in the near future. One interesting note in MAS’s notice is that Three Arrows informed the regulator of its intent to cease operations in the Lion City in early May, presumably as part of its move to Dubai – which hasn’t yet happened.
MAS also notes that “in light of recent developments which call into question the solvency of the fund managed by [Three Arrows], MAS is assessing if there were further breaches by [Three Arrows] of MAS’s regulations.“
Get your popcorn.
Let’s see if management declares the Singapore fund insolvent, as it did its BVI counterpart.
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