Dubai’s Virtual Assets Regulatory Authority (VARA) issued a written reprimand to the four founders of OPNX Exchange and its CEO according to a formal notice published by the authority. The four founders include Mark Lamb, Sudhu Arumugam, and founders of failed crypto hedge fund Three Arrows Capital, Su Zhu, and Kyle Davies. As per the notice, the authority became aware of OPNX soliciting, and collecting personal data from the public to participate in its new (to be launched) exchange.
VARA is the competent entity in charge of regulating, supervising, and overseeing Virtual Asset services in the Emirate of Dubai (excluding the Dubai International Financial Centre).
Through social media platforms, OPNX had been engaged in marketing the exchange without establishing warranted restrictions for residents of Dubai/UAE in February 2023. As per VARA, OPNX Exchange is unlicensed and unregulated. Therefore, the named individuals, including Zhu and Davies are breaking the law by operating and promoting it.
The notice mentioned that OPNX is conducting unregulated activity, and highlighted the major issues included carrying out VA exchange services on an unregulated basis in and from the emirate of Dubai. Also, marketing, promoting and/or advertising OPNX services and its native token [FLEX] without the necessary permits from VARA.
OPNX launched the exchange on opnx.com, providing VA Exchange services – a regulated activity under the VARA regime, without securing any regulatory licenses, and as such operating in contravention of local laws.
In February, VARA issued OPNX and its founders a cease and desist order for (i) establishment of OPNX and (ii) marketing and promotion of OPNX exchange services. 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.