Key Points:
Dubai fines the OPNX exchange and its founders $2.8 million for market rule breaches.
OPNX was hit with a $2.7 million fine; the founders smaller penalties were paid.
VARA to take further steps against founders for unpaid fines and compliance.
Dubais Virtual Assets Regulatory Authority (VARA) has imposed fines totaling nearly $2.8 million on the founders of the crypto exchange OPNX and the exchange itself as part of the ongoing crackdown on cryptocurrency-related activities.
The co-founders, Kyle Davies and Su Zhu, who also played roles in the failed crypto hedge fund Three Arrows Capital (3AC), faced penalties due to violations of market regulations.
VARA issued a notice on Wednesday detailing the fines, indicating that the co-founders and their exchange were fined for multiple infringements.
The regulator fined OPNX a significant amount of 10 million dirhams (approximately $2.7 million) for failing to adhere to market regulations. Notably, this fine remains unpaid at the time of the notices publication.
Furthermore, Davies and Zhu, OPNX co-founder Mark Lamb, and CEO Leslie Lamb faced separate penalties of $54,000 each. These fines were related to their failure to meet the standards set by the regulator for marketing, advertising, and promotional activities.
However, these penalties were promptly paid by the parties involved.
Despite the paid fines, VARA has emphasized that it will take additional actions to address the unpaid penalty incurred by OPNX. These actions might encompass further financial penalties and measures to recover the payment and rectify the behavior that led to the violations.
The regulatory action against OPNX and its founders comes in the context of Dubais increased scrutiny of the cryptocurrency sector. Dubai has introduced a new regulatory framework requiring crypto-related firms catering to retail investors to obtain licenses from VARA.
OPNX, co-founded by Davies, Zhu, and Mark Lamb, experienced rapid growth in trading volume, reaching $30 million by late June, despite its modest beginnings earlier in the year.