The Virtual Assets Regulatory Authority (VARA) in Dubai has issued a warning to the four founders of the OPNX Exchange and its CEO, Leslie Lamb. According to VARA, the exchange is unlicensed and unregulated, and therefore, the named individuals are breaking the law by operating and promoting it. The founders include Mark Lamb, Sudhu Arumugam, Su Zhu, and Kyle Davies, who were also the founders of the failed crypto hedge fund Three Arrows Capital.
Repeated Cease and Desist Orders
On February 27, VARA issued a cease and desist order for the establishment and marketing of the OPNX Exchange. Despite this, the exchange was launched on April 4, prompting VARA to issue a second cease and desist letter on March 10. The authorities found that the exchange was restricted to the residents of the United Arab Emirates (UAE), but the marketing and promotion material for OPNX remained accessible to the residents.
VARA warned investors about the unregulated exchange through an Investor and Marketplace Alert on April 12. In response, CEO Lamb stated that OPNX Exchange has not targeted Dubai or UAE in any marketing or promotion and has not violated any laws since UAE customers were not able to open an account on OPNX. Meanwhile, Zhu clarified that he and Davies are not involved in the day-to-day running of the exchange, although they contributed to the initial ideas for OPNX.
Dubai authorities are striving to take a stricter approach toward crypto regulation while balancing its ambitions to become an industry hub. The warning to OPNX Exchange founders is an indication of the Dubai authorities’ tightening regulations. VARA is closely monitoring the situation and investigating OPNX’s activities to assess further corrective measures that may be required to protect the market.
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