DUBAI – The Dubai authorities have reprimanded the co-founders of failed crypto hedge fund Three Arrows Capital for operating and promoting their new digital-asset exchange OPNX without the required local licence.
Dubai’s Virtual Assets Regulatory Authority (Vara) issued a written reprimand to Mr Zhu Su and Mr Kyle Davies, as well as OPNX’s two other co-founders and its chief executive, on April 18, according to a statement from the regulator.
Vara said it will keep investigating OPNX’s activity “to assess further corrective measures that may be required”.
The action against OPNX is the latest sign of Dubai regulators taking a stricter approach towards crypto, even as the emirate attempts to position itself as a hub for the industry.
That push coincides with broader efforts by the United Arab Emirates (UAE) to get off the Financial Action Task Force’s “grey list” of jurisdictions that do not do enough to uncover illicit funds, Bloomberg News reported in April.
Mr Zhu and Mr Davies started OPNX together with Mr Mark Lamb and Mr Sudhu Arumugam in 2023, marketing it as an exchange focused on trading crypto claims.
The Three Arrows founders, who have spent months sparring with liquidators trying to recover money for creditors of their fallen fund, have made Dubai one of their main bases since its implosion last summer. They were previously based in Singapore.
Mr Lamb and Mr Arumugam, along with OPNX chief executive Leslie Lamb, were also reprimanded by Vara, the watchdog said. Ms Lamb said the firm has not done any marketing targeting Dubai or the wider UAE. She said OPNX is cooperating with Vara’s investigation and does not believe it violated any rules.
“At no point in time have UAE customers been able to open an account on OPNX,” Ms Lamb said in a WhatsApp message. Mr Zhu said in a separate message that “while Kyle and I helped contribute the initial ideas for OPNX, Leslie is very much the CEO and we aren’t involved in day to day”. Mr Lamb and Mr Arumugam did not immediately respond to requests for comment.
Vara said it became aware in February that OPNX was soliciting customers for its yet-to-be-launched platform and collecting personal data.
“Through social media platforms, OPNX had been engaged in marketing the exchange without establishing warranted restrictions for residents of Dubai/UAE,” the regulator said.
The regulator said it issued a cease-and-desist order to the company and its founders on Feb 27, followed by a second notice on March 10. OPNX was then launched on April 4, according to Vara. A few days after that, Vara issued an “Investor and Marketplace Alert” regarding OPNX.
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