The Immediate Fallout
Dubai’s Virtual Asset Regulatory Authority (VARA) has imposed a significant fine on OPNX, a cryptocurrency project initiated by the founders of the now-defunct digital asset hedge fund, Three Arrows Capital (3AC). This action comes shortly after VARA issued a reprimand in May. While the project’s executives have settled their fines, OPNX has yet to do so, prompting the regulator to contemplate further measures against the platform.
Vara shall determine consequential actions warranted against OPNX, which may include further fines, penalties, and/or taking any actions necessary to recover payment and definitively remedy the behavior including, but not limited to, referring the matter to any law enforcement agency(ies) or competent courts.
VARA
On August 16, 2023, VARA disclosed that OPNX had not yet settled a fine of 10 million AED ($2.72 million) levied against them on May 2 for a market offense. Additionally, penalties of 200,000 AED ($54,450) were imposed on OPNX CEO Leslie Lamb, 3AC founders Su Zhu and Kylie Davies, and OPNX co-founder Mark Lamb for breaches in marketing, advertising, and promotions regulations. All four individuals have since cleared their fines.
A Controversial Launch
The introduction of OPNX in April 2023 was met with skepticism from the crypto community. This skepticism largely stemmed from the fact that the platform was the brainchild of Zhu and Davies, who had previously been involved in a cryptocurrency project that failed, resulting in significant losses for investors. As of now, OPNX boasts an average daily volume of $102 million, with a 24-hour trade volume surpassing $165.8 million and a seven-day trade volume reaching $715 million.
Subsequently, OPNX announced a partnership with a new venture capital fund named 3AC Ventures, distinct from the collapsed hedge fund 3AC. Davies’s statement, “3AC is dead, long live 3AC Ventures,” accompanied this announcement. However, this VC fund, which promises “superior risk-adjusted returns without leverage,” was met with skepticism by community members.
From My Point of View
The actions of VARA highlight the importance of regulatory oversight in the rapidly evolving cryptocurrency market. While the fines imposed on OPNX and its executives serve as a deterrent to potential market offenders, it also underscores the need for transparency and adherence to regulations in the crypto space.
The skepticism surrounding OPNX’s launch, given the founders’ history, is understandable. It’s essential for new platforms to establish trust, especially when previous ventures have failed. As I see it, while the introduction of 3AC Ventures might be a step towards rebuilding that trust, the reception from the community indicates that there’s still a long way to go.
However, it’s also worth noting that the swift action by VARA is a testament to the robust regulatory framework in place in Dubai, ensuring that market participants operate within the confines of the law. This not only protects investors but also enhances the credibility of the cryptocurrency market in the region.
