- Dubai’s Virtual Assets Regulatory Authority (VARA) sent the OPNX Exchange founders an official reprimand.
- Five people received the warning, including Kyle Davies, Su Zhu, and the founders of OPNX and the now-defunct hedge firm Three Arrows Capital.
Authorities in Dubai have condemned the co-founders of the bankrupt cryptocurrency hedge fund Three Arrows Capital for advertising their new digital asset exchange, OPNX, without the required local license.
OPNX, which stands for Open Exchange, is the latest project of 3AC co-founders Kyle Davies and Su Zhu, as well as the two creators of the defunct exchange CoinFLEX.
The regulator claims that OPNX utilized social media channels for marketing purposes in Dubai and the UAE without adhering to the necessary limitations. Even before the platform officially launched in February, VARA first learned about OPNX’s marketing initiatives.
The regulator declared that it will keep looking at the exchange’s activities to see if any more corrective actions were required. Regardless of preparing itself as a center for the industry, Dubai has been taking a more restrictive approach toward cryptocurrencies.
Even as the emirate works to establish itself as a core for the industry, the action against OPNX is the most recent indication that officials in Dubai are adopting a tougher stance towards cryptocurrencies. This initiative is part of broader measures by the UAE Authority to ensure user protection, including the start of licence applications for VASPs.
It is noteworthy that spot and futures trading are available on OPNX, and the exchange has also announced the debut of a service that would let investors trade insolvency claims for bankrupt platforms like FTX and Celsius.
The cautionary note was given two weeks ago, and law enforcement agencies are advising the public to proceed with prudence when dealing with the exchange while more investigations are ongoing.
OPNX and its creators allegedly received a cease-and-desist order from VARA in February, which led to some limitations being placed on citizens of Dubai and the other United Arab Emirates (UAE). They were not, nevertheless, fully implemented throughout all communication channels, which resulted in a second Cease and Desist notice in March.
The latest warning comes after the April 4, 2023, opening of OPNX’s exchange and April 4, 2023, release of an Investor and Marketplace Alert by VARA, which is presently doing additional due diligence to decide what steps to take.