The Virtual Assets Regulatory Authority (VARA) based in Dubai has taken strict measures against the digital assets exchange Open Technology Markets (OPNX) by imposing a hefty fine of 10 million dirhams ($2.7 million). This penalty comes as a consequence of OPNX’s failure to adhere to the regulations regarding marketing, advertising, and promotions protocols.
Furthermore, VARA has not only fined OPNX but also levied individual fines of AED 200,000 against the founders of Three Arrows Capital, Kyle Davies and Su Zhu, along with the co-founder of OPNX, Mark Lamb, and its chief executive Leslie Lamb. It is noteworthy that the specified fines have already been paid in full by the parties involved.
However, the situation escalates as the AED 10 million fine related to the breach on May 2 remains unpaid. In response, VARA has issued a warning that it might pursue additional actions to ensure compliance. The regulatory body stated, “… VARA shall determine consequential actions warranted against OPNX, which may include further fines, penalties, and/or taking any actions necessary to recover payment and definitively remedy the behavior including, but not limited to, referring the matter to any law enforcement agency(ies) or competent courts.”
Notably, Three Arrows Capital was previously a crypto hedge fund based in Singapore, which faced a significant collapse in June 2022 due to its inability to repay debts. This downfall followed the aftermath of a crypto market crash and the risky trading strategy that left the company unable to fulfill its financial obligations. As a result, the company had to file for bankruptcy.
The implementation of these fines and penalties by VARA underlines the importance of complying with the regulations set forth for digital assets exchanges. The financial repercussions of non-compliance serve as a reminder to entities operating in the crypto and blockchain space that adherence to regulations is crucial for maintaining a lawful and sustainable environment.