Dubai’s cryptocurrency realm witnesses a resounding regulatory move as the Virtual Assets Regulatory Authority (VARA) imposes a substantial fine of $2.7 million on the co-founders of Three Arrows Capital, a former prominent crypto hedge firm. The penalty is rooted in their connection with the controversial OPNX digital asset market, a move reflecting the stringent stance of VARA on non-compliance.
This fine underscores the gravity of disregarding VARA’s regulatory framework. In earlier actions, VARA criticized Kyle Davies and Su Zhu, the founders of OPNX, for their involvement in May. The platform, which allowed bankruptcy claims trading, drew criticism due to its unconventional nature.
The founders of OPNX, co-founder Mark Lamb and CEO Leslie Lamb, now face fines of 200,000 UAE dirhams ($54,451) each. These penalties are attributed to violations in marketing, advertising, and promotional laws, showing VARA’s resolve to enforce compliance.
Dubai’s regulatory authority signals that further actions against OPNX will depend on its ability to clear the imposed fines. Additional measures, including sanctions or fines, will be taken to ensure compliance and address transgressions.
Despite the promising concept, OPNX commenced with modest operations, processing under 2,000 transactions totaling $2 on its inaugural day. Significant supporters initially distanced themselves, highlighting the challenges the platform faced.
Throughout the current year, Dubai has heightened its cryptocurrency oversight. A new regulatory framework requires licenses for companies catering to retail investors from VARA. This aligns with UAE’s goal to exit the “gray list” of the Financial Action Task Force, targeting territories with inadequate capabilities to detect illicit financial activities.
The OPNX fine marks a significant stride for VARA, representing its largest penalty since its establishment the prior year. In February, VARA pointed out the company’s proactive approach to compliance through pursuing users and collecting data.
These regulatory actions showcase the evolving crypto landscape in Dubai. Amidst increasing scrutiny, industry players must navigate carefully to adhere to guidelines and avoid repercussions. The $2.7 million fine on Three Arrows Capital’s founders and their OPNX involvement marks a substantial juncture in Dubai’s regulatory journey, demonstrating the delicate balance between compliance, innovation, and consequences in the cryptocurrency realm.