Dubai’s VARA fines OPNX, founded by former 3AC leaders Kyle Davies and Su Zhu for marketing violations.

Dubai’s Virtual Assets Regulatory Authority (VARA) imposed a fine of AED 10 million ($2.7 million) on the OPNX exchange for violating marketing rules. The fine, issued on May 2, 2023, remains unpaid. Additionally, the founders, including Kyle Davies, Su Zhu, Mark Lamb, and CEO Leslie Lamb, were penalized AED 200,000 ($54,451).

Founded by former Three Arrows Capital (3AC) leaders, OPNX has been controversial since its launch. The exchange allows investors to trade bankruptcy claims of companies like FTX and CoinFLEX, leading to significant backlash.

VARA’s actions are part of a broader effort to ensure compliance within the virtual assets space. The regulatory body introduced guidelines for virtual assets service providers (VASPs) in February, and non-compliance may lead to heavy penalties.

The situation with OPNX has also drawn attention from other crypto figures, with Arthur Hayes of BitMEX sarcastically commenting on OPNX’s negative margins.

$2.7mm fine for $2 of trading volume. They are def in the VC game, -ve margins, “we’ll make it up on volume” well played sers. 😭😭😭😭😭😭 https://t.co/lrEdCZCvSA

— Arthur Hayes (@CryptoHayes) August 16, 2023

VARA has not detailed the actions it might take if the fine remains unpaid but has mentioned options like court proceedings or additional fines. The authority’s stance sends a message that non-compliance will not be tolerated, reflecting a growing trend of regulatory oversight in the virtual assets realm.

The OPNX exchange has faced allegations of faking its trading volume and has been involved in a “shadow recovery process” to donate to Three Arrow Capital creditors. The native token of OPNX Exchange (OX) is trading at $0.060, down by around 12% in the past 24 hours, adding to the exchange’s challenges.