Dubai Reprimands 3AC Founders’ New Crypto Exchange

OPNX CEO Leslie Lamb told Blockworks that the exchange has no Dubai or UAE clientele, despite the regulator reprimand.

article-image

OPNX co-founders Su Zhu and Kyle Davies | Axel Rangel art modified by Blockworks

share

Co-founders of controversial (and bankrupt) crypto hedge fund Three Arrows Capital have been taken to task over allegedly promoting their new exchange OPNX without securing a local license in Dubai.

They were called out by the Virtual Assets Regulatory Authority (VARA) of Dubai for allegedly promoting their crypto exchange, OPNX, while not ensuring proper restrictions for local residents.

It appears VARA caught wind of OPNX soliciting and collecting personal data from the public in February, according to a notice published Tuesday. As a result, the regulator issued a cease and desist order to the founders last month.

“OPNX launched the exchange on opnx.com, providing VA Exchange services — a regulated activity under the VARA regime — without securing any regulatory licences, and as such operating in contravention of local laws,” VARA said.

Even after applying some restrictions, UAE residents still appeared to have access to OPNX’s promotions and marketing communication. 

OPNX, short for Open Exchange, is the latest brainchild of 3AC co-founders Kyle Davies and Su Zhu, alongside the two founders of bankrupt exchange CoinFLEX. All four received the written reprimand from Dubai’s VARA, as well as OPNX CEO Leslie Lamb.

The founders claim that OPNX, which went live on April 4, has raised $25 million in investment capital

After their crypto hedge fund went bust in June last year, Davies and Zhu relocated from Singapore to Dubai, where they were reportedly looking to establish a new operational hub.

Leslie Lamb told Blockworks that OPNX was launched in Hong Kong, and the exchange had taken measures to prevent UAE residents from accessing and signing up for the site.

“To confirm, we have no Dubai or UAE customers and do full KYC on all users,” she told Blockworks in a LinkedIn message.

“We have responded and cooperated with VARA every step of the way and they have invited us to meet with them and discuss the requirements for applying for a VARA license.”

OPNX hopes to not only be a venue for trading crypto, but also crypto-related bankruptcy claims. There’s supposedly a $20 billion market for crypto claims out there that OPNX wants to tap. 

Its focus is on bankrupt asset claims, allowing creditors to “unleash their locked claims directly into crypto or use them as margin capital,” according to its website.

The authority’s crackdown on OPNX reflects the trend of emirate regulators adopting a more rigorous stance towards cryptocurrencies amid efforts to establish the region as an industry hot spot.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

Scientific reputation should be determined by a decentralized community of scientists, not the validation of higher institutions

article-image

Paxos is getting off scot-free after the SEC said it wouldn’t pursue legal action against the company

article-image

The Srcful partnership is part of a broader plan to onboard Helium “subnetworks”

article-image

Plus, a look into US spot BTC funds six months into trading

article-image

A Swedish energy-focused project named Srcful proposed to become a Helium subnetwork with its own ENERGY token

article-image

Securitize CEO Carlos Domingo thinks BUIDL will potentially hit its next $500 million milestone in just a few months