3AC Founders’ OPNX Exchange Formally Reprimanded by Dubai Crypto Regulator

The action by the Virtual Assets Regulatory Authority targeting Kyle Davies, Su Zhu and others follows two cease-and-desist letters for operating an unregulated exchange.

AccessTimeIconMay 2, 2023 at 10:12 a.m. UTC
Updated May 2, 2023 at 3:59 p.m. UTC

OPNX, a bankruptcy claims exchange set up by the founders of collapsed hedge fund Three Arrows Capital (3AC), has been formally reprimanded by Dubai's crypto regulator for operating an unregulated exchange, according to an official notice.

The letter was sent on April 18 to OPNX's Kyle Davies and Su Zhu, who were the founders of 3AC, after two cease-and-desist orders for marketing the exchange to residents of Dubai and the United Arab Emirates were issued by the regulator in February and March.

“VARA is continuing to actively monitor the situation and investigate OPNX's activity to assess further corrective measures that may be required to protect the market,” Dubai’s Virtual Assets Regulatory Authority said in a statement.

The reprimand was also sent to OPNX founders Mark Lamb and Sudhu Arumugam and to Chief Executive Officer Leslie Lamb, the regulator said.

OPNX, which allows investors to trade bankruptcy claims for companies such as FTX and CoinFLEX, has had a rocky start, with under $2 traded in its first 24 hours of opening. Trading firms Susquehanna International Group (SIG) and DRW, as well as venture-capital firm Nascent – all claimed by OPNX to be “major investors” in the project – have have denied involvement.

In March, Davies and Zhu were the subject of court orders in both the British Virgin Islands and in the U.S., after being accused of refusing to engage in proceedings that followed the firm’s bankruptcy.

After Bloomberg reported on VARA's news earlier on Tuesday, CoinFLEX's token FLEX was down 5% by press time, according to data from CoinMarketCap.

Update (May 2, 10:21 UTC): Adds FLEX token price movement in last paragraph

Edited by Sandali Handagama.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.