Dubai Regulators Warn 3AC Founder-Owned Crypto Exchange OPNX

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Warning to OPNX for unregistered license

Dubai’s Crypto Assets (Cryptocurrency) Regulatory Authority (VARA) said in April that the co-founders of the bankrupt 3 Arrows Capital (3AC) had operated and promoted the new exchange OPNX without obtaining the necessary licenses. I was warned in writing.

On April 18, VARA sent a written notice to OPNX executives Su Zhu, Kyle Davies, Leslie Lamb and others to investigate whether further corrective action is required. It is said that VARA continued:

VARA has discovered that OPNX is collecting personal data from members of the public who are trying to register on the new exchange they are about to open.

OPNX marketed the exchange through social media, even without restrictions to residents of Dubai and the United Arab Emirates (UAE).

It also noted that OPNX, which began operations in April, offers cryptocurrency trading services without securing a regulatory license.

VARA also issued a cease and desist order to OPNX in February, imposing restrictions on its activities for residents of the United Arab Emirates (UAE), including Dubai. However, it did not enforce this on some of its communication channels with consumers, and it issued a second suspension order in March.

Meanwhile, according to Bloomberg, OPNX CEO Leslie Lamb said, “We do not market to Dubai or the UAE, and we have never had UAE customers open an account with OPNX.”

Zhu also said Leslie Lamb is in charge of the actual running of the business, and that Zhu and Davies are not involved in how they conduct day-to-day business.

What is OPNX

OPNX is a business jointly launched by 3AC founders Zhu and Davies, and co-founders Mark Lamb and Sudhu Arumugam of cryptocurrency exchange CoinFLEX, which is currently undergoing business restructuring. The current CEO, Leslie Lamb, is Mark Lamb’s wife.

It offers spot trading and futures trading, and will also launch a service that allows investors to trade bankruptcy claims of bankrupt platforms such as FTX.

3AC is a cryptocurrency hedge fund that filed for bankruptcy in the United States in July last year after defaulting on its debt after the collapse of the old Terra ecosystem. Liquidator firm Teneo said 3AC’s founders were uncooperative in tracking down assets, failing to provide proper books and records.

connection: Three Arrows Capital liquidator reports on asset holding status

Dubai strengthens regulation and supervision

Dubai’s Virtual Currency Regulatory Authority (VARA) is in the process of stepping up regulation and supervision of cryptocurrencies.

In April, it was reported that the company intended to increase oversight of companies such as Binance that wanted to obtain business licenses. It asks companies to provide more information about their ownership structure, governance and audits.

connection: Dubai regulator asks Binance, other companies applying for business licenses to provide additional information = report

In February, it announced guidelines on the issuance of virtual currency, the licensing system, the prevention of money laundering and terrorism financing, and promotions. It also bans highly anonymous currencies.

connection: Dubai regulator announces regulatory policy on virtual currency Prohibition of highly anonymous currency

What is anonymous currency?

A virtual currency that emphasizes user privacy and hides (or does not record) transaction records such as senders.

Cryptocurrency Glossary