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Dubai Regulator Reprimands OPNX Founders for Conducting Unregulated Activity

Dubai Regulator Reprimands OPNX Founders for Conducting Unregulated Activity

OPNX, created by defunct hedge fund Three Arrows Capital (3AC) founders, has been controversial from the beginning. The exchange has recently been reprimanded by Dubai’s Virtual Assets Regulatory Authority (VARA) for carrying out unregulated activity.

Five OPNX founders, including Kyle Davies and Su Zhu, were issued a written reprimand for conducting unregulated virtual asset exchange services from the Emirate of Dubai and engaging in marketing, promotion, and advertising of OPNX services and its native token (FLEX) without the necessary permits from the regulator.

OPNX Under Dubai Regulator’s Scrutiny

VARA discovered that OPNX solicited and collected personal data from the public to participate in its new exchange. It further added that the platform marketed the exchange without setting up warranted restrictions for the residents of Dubai and the United Arab Emirates (UAE).

The authorities issued two cease-and-desist orders to the OPNX founders even before its launch. A week after the official rollout of OPNX, VARA alerted investors that the platform is unregulated.

“VARA notes that thereafter, certain restrictions regarding residents of Dubai/UAE were subsequently applied on the OPNX website. Such restrictions were, however, not applied comprehensively across all OPNX communication channels or promotional and marketing materials – that have consequently, remained accessible to UAE residents thereafter.”

The regulator is investigating OPNX’s activity to assess further corrective measures due to the continued lack of satisfactory remedial action by the operators of the crypto platform.

Heated Argument With “Investors”

Several community members have expressed dissatisfaction with the new project because it was founded by the same people who started the now-failed crypto hedge fund 3AC. Last month, OPNX identified its financial backers to be Susquehanna (SIG), Nascent, AppWorks, DRW, MIAX Group, Merchant Bank International, Token Bay Capital, and Tuwaiq Limited.

However, the supposed investors have denied participating in the platform’s funding round or having any association with it at all, prompting strongly worded statements from CEO Leslie Lamb, who accused the “investors” of engaging in ugly tactics.