Key takeaways:
- The Virtual Assets Regulatory Authority of Dubai penalised cryptobankruptcy claims exchange OPNX and its founders roughly $2.8 million.
- These actions include additional financial penalties as well as steps to collect the payment and correct the behaviour that resulted in the violations.
The founders of Three Arrows Capital, Su Zhu and Kyle Davies, are currently facing a fresh legal issue in Dubai related to their newly established digital-asset exchange called OPNX.
This exchange, co-founded by the aforementioned former hedge fund managers, has incurred a substantial fine of approximately $2.8 million from the Dubai regulator, VARA (Virtual Assets Regulatory Authority). The penalty was imposed due to violations of market regulations.
Bloomberg reports that VARA issued this fine, amounting to 10 million dirhams (equivalent to $2.7 million), in May, which remains unpaid as of now. The regulatory body asserted that various individuals were penalized, including OPNX’s co-founders Su Zhu, Kyle Davies, and Mark Lamb, along with CEO Leslie Lumb.
These penalties were imposed because of their failure to adhere to the state’s regulations regarding marketing, advertising, and promotional activities.
While a portion of the fines, specifically 200,000 dirhams ($54,451), has been paid, the larger unpaid fine has led VARA to consider additional measures.
As indicated in VARA’s official announcement, all the fines mentioned earlier were brought before VARA’s Grievance Committee, which was established in accordance with Article 22 of Law No. (4) of 2022, governing Virtual Assets in Dubai’s Emirate.
Following proper governance protocols, the Committee thoroughly examined the grievance referral and subsequently affirmed the continuation of the enforcement measures that were originally undertaken.
In a statement, VARA mentioned that due to OPNX’s outstanding penalty, they will evaluate and decide on necessary actions, which could encompass further fines, penalties, and the initiation of procedures to recover the unpaid amount.
This would be done with the ultimate goal of rectifying the non-compliant behavior.
Dubai has taken a stricter approach towards cryptocurrencies this year, implementing a new regulatory framework that mandates companies catering to retail investors to obtain complete licensing from VARA.
Over the course of this year, Dubai’s regulatory bodies have consistently demonstrated a determined approach in addressing breaches within the cryptocurrency industry. An impactful example of this resolve occurred when regulatory authorities decided to suspend the operational license of the crypto exchange BitOasis.
Notably, BitOasis was the first platform to obtain an operational license in the emirate. The suspension was a direct consequence of BitOasis’ inability to meet the prescribed conditions outlined by the regulatory entity within the specified timeframe.
