In a formal notice issued by Dubai’s Virtual Assets Regulatory Authority (VARA), the regulator has targeted a crypto exchange for functioning illegally. Reportedly, the regulator issued a written reprimand to the four founders of OPNX Exchange and its CEO Leslie Lamb.
Sources reveal that the four founders associated with the exchange include Mark Lamb, Sudhu Arumugam, and founders of failed crypto hedge fund Three Arrows Capital, Su Zhu, and Kyle Davies.
According to VARA officers, the OPNX Exchange is unlicensed and unregulated and has been functioning illegally. Therefore, the named individuals, including Zhu and Davies have been breaking the law by operating and promoting the agency.
As stated in the notice, the digital assets regulator first issued a cease and desist order for the establishment and marketing of the OPNX Exchange on February 27. Subsequently, the authorities found that the OPNX was restricted to the residents of the United Arab Emirates.
However, the authorities highlighted that at this point, the restrictions were not imposed on the marketing and promotion material of the exchange and it remained accessible to the residents.
Following that, on March 10, the regulator issued a second cease and desist letter to the exchange. Notably, despite these letters from the authorities, the OPNX Exchange was launched on April 4.
After this, VARA issued an Investor and Marketplace Alert on April 12, warning investors that OPNX Exchange was unregulated and unlicensed. In its notice, the authorities noted:
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.
In their response to the action from the regulator, CEO Lamb expresses her opinion to a media house. She says that OPNX Exchange has not undertaken any marketing or promotion targeting Dubai or the UAE, and therefore, has not violated any laws. She stated in a WhatsApp message directed to a media platform:
At no point in time have UAE customers been able to open an account on OPNX.
Meanwhile, Zhu told Bloomberg that he and Davies are not involved in the day-to-day running of the OPNX Exchange — although they contributed to the “initial ideas for OPNX.”
Notably, the actions against OPNX Exchange are an indication of Dubai authorities tightening the reins. As reported by Todayq News in April, VARA has intensified its authority over the crypto exchanges functioning in the region. The regulator has brought under its radar several big crypto firms including Binance, which is reportedly the largest crypto exchange by market capitalization.
The increasing vigilance of the regulator can be counted as a measure to balance caution with its ambitions to become an industry hub. Additionally, the region has also been working to improve its reputation with the Financial Action Task Force (FATF) and be removed from the agency’s “gray list” which includes regions with strategic anti-money laundering and countering the financing of terrorism (AML/CFT) deficiencies.