Three Arrows Capital Co-Founders Slapped with a Hefty $2.7M Fine by VARA Over New Digital Asset Exchange, OPNX!
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According to a recent notice, the co-founders of the once-prominent crypto hedge fund, Three Arrows Capital, have been hit with a massive $2.7 million fine by Dubai’s regulatory authorities. The fine is a result of their involvement in the new digital asset exchange, OPNX.
VARA Makes The Biggest Fine Since Inception
Dubai’s Virtual Assets Regulatory Authority (VARA) has imposed a fine of close to $2.8 million on the cryptocurrency exchange OPNX and its founders, as revealed in a recent Wednesday announcement.
OPNX, established by Kyle Davies and Su Zhu — people behind the unsuccessful hedge fund Three Arrows Capital (3AC) — had previously faced VARA’s censure in May. Following the decline of 3AC, Davies and Zhu faced criticism for launching OPNX, a platform that enables investors to trade bankruptcy claims of firms including FTX and CoinFLEX.
The Virtual Assets Regulatory Authority (VARA) announced that they had levied a fine of 10 million dirhams ($2.7 million) against the company in May, which remains unsettled. The authority confirmed that Su Zhu, Kyle Davies, OPNX co-founder Mark Lamb, and CEO Leslie Lamb have each settled penalties of 200,000 dirhams ($54,451) due to non-compliance with marketing, advertising, and promotional regulations.
Given the outstanding fine, VARA stated, “Based on the company’s failure to clear the fine, VARA will decide on the subsequent measures to be taken against OPNX. This could encompass additional fines, penalties, or any necessary steps to ensure payment and decisively address the misconduct.”
In its initial 24 hours of operation, the exchange conducted trades valued at less than $2. Meanwhile, trading entities that were claimed to be significant investors in the OPNX project refuted any association.
Dubai’s Crypto Initiatives So Far
This year, Dubai has intensified its regulatory scrutiny on crypto, introducing a new framework that mandates firms serving retail investors to obtain a license from VARA. This move follows the plan of the United Arab Emirates to be removed from the Financial Action Task Force’s “gray list” – a list of regions deemed inadequate in detecting illicit financial activities.
Zhu and Davies were main in establishing OPNX this year, promoting it as a platform for trading cryptocurrency claims. The co-founders of Three Arrows, who have been in disputes with liquidators aiming to retrieve funds for the creditors of their collapsed fund, have chosen Dubai as one of their main operational hubs following its downfall last summer.
The penalty imposed on OPNX is the highest fine disclosed by VARA since its inception the previous year. In February, VARA noted that the company was actively seeking customers for its platform and gathering personal information.
By early May, the regulator had publicly admonished Zhu, Davies, Mark Lamb, Leslie Lamb, and another individual for running OPNX without the necessary authorization. In May, Leslie Lamb informed that the company had not made any marketing efforts towards Dubai or in the UAE. She mentioned that OPNX was collaborating with VARA’s inquiry and was confident that they hadn’t breached any regulations.
Filed under: Bitcoin - @ August 16, 2023 1:11 pm