Founders of the now-bankrupt crypto lending firm (3AC), Su Zhu and Kyle Davies, have found themselves in hot waters with the Dubai regulatory body after their new exchange, OPNX, was flagged down by the agency. According to reports, Dubai’s crypto regulator (VARA) has fined OPNX and its founders over a breach of the region’s financial laws.
Dubai’s Regulatory Move Regarding OPNX
Dubai’s VARA has reportedly imposed fines on both OPNX and its founders for breaches of its digital asset regulations. Moreover, this action follows a series of warnings the regulatory body sent to the trading entity earlier.
VARA imposed a fine of AED 10,000,000 ($2.7 million) on the crypto firm on May 2. Also, the OPNX founders – Kyle Davies, Mark Lamb, and Su Zhu – were individually fined by the regulator, with a total of AED 200,000 ($54,500) levied against each.
It is worth noting that Leslie Lamb, the company’s CEO, was also not exempted from the monetary penalty. Moreover, the regulator has attributed these fines to OPNX’s violation of an ordinance governing firms’ marketing and promotion of digital assets in that region.
OPNX failed to align its promotional moves with the requirements outlined in “paragraphs II.1 and II.5 of the Marketing Regulation.” On the other hand, VARA has confirmed that the company’s founders and CEO have paid all fines, but the penalty imposed on the company remains outstanding and unpaid.
The regulator has stated its intention to take “follow-up measures” in response to OPNX’s decision to refuse payment of the $2.7 million fine. Additional fines or penalties may be imposed on the firm, as well as the initiation of formal procedures to reclaim the owed amount to rectify the situation effectively.
Should the need arise, the regulator has confirmed that it would involve the services of law enforcement agencies or pursue legal action against OPNX in the appropriate courts.
Is OPNX Another 3AC?
OPNX’s current situation has led observers to compare its recent happenings with the defunct crypto lender. It raises concerns about potential parallels between Davies and Zhu’s OPNX and the crypto lending platform.
Recall that 3AC, with headquarters in Singapore, faced severe debt crises, which later forced it to liquidate in June 2022 following a court order. At that time, the company filed for Chapter 15 bankruptcy protection in the United States.
Despite several criticisms from the crypto community, Davies and Zhu founded OPNX, an innovative crypto exchange specializing in crypto claims trading and derivatives. While it was still in operation, OPNX has assisted claimants in various bankruptcy scenarios, such as FTX and CoinFLEX, and helped them convert their claims into usable collateral for cryptocurrency trading.
It is worth noting that Dubai has one of the most crypto-friendly regulatory approaches, which has seen leading crypto exchanges like OKX and Binance open up shops in that region.