Dubai Regulator Scolds Founders of Defunct Hedge Fund Over Unregulated Exchange OPNX
It seems the founders of the now-collapsed hedge fund Three Arrows Capital (3AC) just can’t catch a break. Kyle Davies and Su Zhu, the masterminds behind 3AC, are once again in hot water, this time with Dubai’s Virtual Assets Regulatory Authority (VARA) over their new project, the Open Exchange (OPNX).
Just when they thought they could put their past troubles behind them and start fresh with OPNX, VARA steps in with a written reprimand. “Not so fast,” says the regulator, accusing the recently-launched exchange of operating without any regulatory licenses.
As if that wasn’t enough drama, the US judge overseeing 3AC’s bankruptcy proceedings has ordered Kyle Davies to turn over financial documents related to the insolvent hedge fund. Tick-tock, Mr. Davies, the new deadline is April 13.
VARA Issues Cease and Desist Orders, But OPNX Carries On
VARA claims to have issued OPNX and its founders a Cease and Desist order back in February, resulting in some restrictions being applied to Dubai and UAE residents. But, like a stubborn child refusing to eat their vegetables, OPNX didn’t comply fully, prompting a second Cease and Desist notice in March.
Undeterred, OPNX launched its exchange on April 4, causing VARA to issue an Investor and Marketplace Alert and a written reprimand on April 18. Will OPNX finally listen, or will they continue to test the patience of the regulator?
A Fresh Start or a Repeat of Past Mistakes?
In an interesting twist, OPNX is a collaboration between the founders of 3AC and the founders of the derivatives exchange CoinFLEX, which is currently undergoing restructuring. One might wonder if this is a recipe for success or another disaster waiting to happen.
Despite the rocky start and regulatory troubles, the founders of OPNX stand by their belief that past failures can lead to future success. “We believe that founders who reach great heights and then fall learn the most important lessons and, therefore, have the most to contribute,” they say on the OPNX website.
With the wisdom gained from their previous ventures, will OPNX’s founders rise like a phoenix from the ashes, or will they find themselves in even more trouble? Only time will tell, but one thing’s for sure: this crypto saga is anything but dull.