Following the collapse of hedge fund company Three Arrows Capital (3AC), its founders, Kyle Davies and Su Zhu, went on to set up the OPNX exchange. However, recent development suggests that this new company may already be facing some challenges.
Dubai Regulators Come For OPNX
Dubai’s virtual assets regulator VARA (Virtual Assets Regulatory Authority), has issued monetary fines against OPNX and its founders. This comes following previous notices that the regulator had sent to the trading firm.
On May 2, the company was fined AED 10,000,000 ($2.7 million) by the regulator. OPNX’s founders – Kyle Davies, Su Zhu, and Mark Lamb – weren’t spared, as VARA issued a fine of AED 200,000 ($54,500) against each of them. The company’s CEO, Leslie Lamb, was also fined the aforementioned sum.
According to VARA, these fines resulted from the company’s violation of an order which regulates how companies market, advertise, and promote digital assets. In this case, OPNX failed to streamline its marketing campaigns to the requirements of “paragraph II.1 and/or II.5 of the Marketing Regulation.”
While the regulator confirmed that the company’s founders and CEO had already “fully paid” their respective fines, the one issued against the company remains unpaid.
VARA has stated that it will determine “consequential actions” against OPNX following the company’s refusal to pay the $2.7 million fine issued against it. Such actions may include subsequent fines or penalties and initiate proceedings to recover the payment and “definitively remedy the behavior.”
The regulator has vowed to go as far as reporting the company to law enforcement agencies or institute an action in courts of competent jurisdiction.
OPNX To Follow In 3AC’s Footsteps?
This recent development undoubtedly brings back memories of the failed 3AC and whether or not Davies and Zhu’s OPNX is bound to follow in the footsteps of the former. Due to the company’s failure to repay its creditors, the defunct Singapore-based crypto hedge fund 3AC had to liquidate in June 2022 following a court order. The company filed for Chapter 15 bankruptcy in the US shortly after.
Despite several criticisms from the crypto community, Davies and Zhu went on to form OPNX, a first-of-its-kind crypto exchange for crypto claims trading and derivatives. The exchange allowed claimants in bankruptcy cases like FTX and CoinFLEX to convert their claims into collateral they could use for crypto trading.
While the sustainability of this new business model remains to be seen, issues with regulators like VARA could hamper the company’s operations and ultimately lead to its winding up.
Total market cap plunges to $1.1 as prices fall | Source: Crypto Total Market Cap on Tradingview.com
