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While market-leading hedge fund Three Arrows Capital has indeed collapsed, its little-known OTC exchange, TPS Capital, is still up and running.
Three Arrow Capital’s “backyard” trading platform
The bankruptcy of the once-famous hedge fund Three Arrows Capital sent the entire digital asset sector reeling, adding fuel to the fire of Bitcoin’s record drop earlier this year.
However, as observed by crypto-financial investors and investigators, there is a little-known legal entity that is still largely out of the media spotlight – and still very active – that has may be covering up a fortune for the recovery… 3AC?
In addition to “surfacing” spending tens of dollars of assets to invest in new projects and dominate the market, 3AC also operates an OTC (over-the-counter) trading desk called Tai Ping Shan (TPS) Capital. Above LinkedInthis organization is described as “The official OTC trading of Three Arrows Capital.” Now, however, this description has changed and the two companies are no longer related.
Crypto industry sources in Asia stated, TPS Capital there was no problem in maintaining regular transactions, even when the parent company 3AC was ordered by the court to liquidate its assets and the investigation agency in Singapore was directly involved.
For creditors seeking compensation from the consequences of 3AC, the legal separation between territories can make the repayment process more complicated. Taken from the original name Tai Ping Shan mountain on Hong Kong island, but TPS Capital is headquartered in the British Virgin Islands (BVI). Although it belongs to the parent company 3AC, according to the filing, TPS Capital has a different ownership structure and anonymous directors.
According to the registration filed in Singapore, the ownership of TPS Capital is divided between two companies registered in BVI named Three Lucky Charms Ltd, TPS Research and TAi Ping Shan Ltd. registered in the Cayman Islands.
In fact, the BVI law does not require directors to disclose their identities. But the name Three Lucky Charms quite similar to Three Arrows Capitalthe top 3 are Su Zhu, Kyle Davies and an unidentified third individual.
Presently, TPS Research – the company owns 47.5% shares of TPS Capital Singapore branch, also does not disclose operator information to the public as permitted by BVI law.
Tai Ping Shan registered in Caymans, owns 5% of the shares of TPS Capital in Singapore. Among them, Paul Muspratt – managing director of West Bay Global Services, a corporate service provider, is one of the directors, along with Steven Sokohl, another West Bay employee, and Yi Long Fung. Yi doesn’t appear much online. He is known as the director of the Canadian registered organization of TPS Capital, operating under the same name, established in February 2022 and having an address in Thornhill, a suburb of Toronto.
After all, where is the money of Three Arrows Capital now?
With a fund promoted as managing billions of dollars, Three Arrows’ filings with the Singapore government show income from the fund much lower than its AUM (assets under management).
According to its year-end 2020 financial report, Three Arrows Singapore said it had total assets of S$3.3 million (~US$2.36 million) and a profit of S$1.15 million (~US$823,015) for the year. About S$6.33 million was paid dividends to Zhu and Davies.
Currently, 3AC’s end of 2021 financial statements are not available.
According to Securities and Exchange Commission (SEC) filings, the Three Arrows “backyard” companies in the British Virgin Islands and Singapore branches split the December 2020 holdings in the Grayscale Bitcoin Trust ( GBTC). 3AC is also licensed to manage S$250 million (~$179 million), according to the Monetary Authority of Singapore (MAS).
An unnamed Singaporean involved in TPS’s digital asset industry said TPS already holds and trades most of 3AC’s treasury, adding that TPS is “where the Three Arrows act”.
The Singapore government pays ‘indifferent’ attention
Earlier this week, the Monetary Authority of Singapore inspected the Three Arrows for misinformation about the size of their holdings and reprimanded:
“The reprimand related to the violations of [Three Arrows Capital] occurred prior to notifying MAS in April 2022. MAS has been investigating these violations since June 2021,” MAS wrote. Three Arrows provided “misleading” information, according to the regulator.
“In light of recent developments that raise questions about the solvency of the fund [Three Arrows Capital] management, MAS is assessing for further violations.” – MAS wrote.
However, while the Three Arrows filed for bankruptcy in New York (haven’t declared bankruptcy in Singapore since 2nd July)TPS continues to use capital to trade, some sources said.
The question is, can the investigating agencies and 3AC’s creditors be able to link the relationship between the 3AC “criminal” and the other ghost companies?
The descriptions of TPS Capital on Linkedin have now been altered to cut ties with 3AC prior to the fund’s bankruptcy.
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