Dubai-based crypto exchange, Open Technology Markets (OPNX), has incurred a $2.7 million fine for violating advertising and marketing rules. According to reports, Dubai’s Virtual Assets Regulatory Authority (VARA) imposed the Fine in May but OPNX has not obliged.
Also, the regulator imposed a $54,000 fine on OPNX’s co-founders Kyle Davies, Mark Lamb, and Su Zhu, alongside its CEO, Leslie Lamb.
OPNX To Face Strict Enforcement Actions
The OPNX crypto exchange launched as a public crypto bankruptcy claims and derivatives marketplace in March 2023. It bears mentioning that the OPNX co-founders Davies and Zhu were the founders of the defunct crypto firm Three Arrows Capital (3AC).
Three Arrows Capital went bankrupt in 2022 due to the impact of the crypto winter escalated by Terra’s UST stablecoin de-peg. After 3AC’s collapse, the founders partnered with Mark and Leslie Lamb to establish OPNX. Their sole aim was to facilitate the retrieval and trading of bankruptcy claims through tokenization.
However, the latest venture, OPNX, has come under the radar of regulators. Dubai’s Virtual Assets and Related Activities Regulation, VARA, announced the fine notice against it on Tuesday, August 15. According to the regulator, the crypto exchange earlier received notices regarding its conduct on April 12 and 27.
Following the notices, VARA imposed an AED10,000,000 and AED 200,000 fine on OPNX and its founders and CEO on May 2. However, OPNX and its executives failed to comply with laws related to virtual assets advertising, promotion, and marketing regulations.
The August 15 notice reads:
As the AED 10,000,000 fine against Open Technology Markets Ltd remains unpaid, VARA shall determine consequential actions warranted against OPNX.
According to VARA, OPNX’s failure to remit the Fine may attract further penalties. Also, the regulator must take necessary actions, including a lawsuit, to enforce payment and compliance.
VARA Committed To Creating A Safe And Secure Virtual Assets Market For Investors
Launched in March 2022 under the Dubai Virtual Asset Regulation Act, VARA aims to establish a legal framework for cryptocurrencies. Its sole aim is to protect Dubai-based investors and set high standards to govern the crypto assets industry.
In February, the regulator imposed anti-money laundering and “gold-standard risk assurance” standards on licensed businesses in the UAE. The regulatory guidelines focus on providing service providers with a comprehensive framework to mitigate risks associated with digital assets.
Dubai continues to advance its digital assets market while establishing comprehensive crypto regulatory guidelines. As part of its efforts to develop a safe crypto landscape, VARA issued licenses to crypto exchanges in February.
In March, Binance, Bybit, and BitOasis also received a license from Vara. Also, Seychelles-based exchanges Huobi and OKX acquired provisional licenses to operate in Dubai.
In May 2023, VARA established a headquarter in the metaverse. It became the first regulatory watchdog to establish a presence in the virtual world.