Dubai Reprimands Three Arrows Capital Founders for Unlicensed Exchange

Regulatory Action Against OPNX

The founders of Three Arrows Capital, a well-known crypto hedge fund, faced reprimand from Dubai’s Virtual Assets Regulatory Authority (VARA) for operating an unlicensed digital-asset exchange, OPNX. This enforcement action reflects Dubai’s stricter regulatory stance on cryptocurrency operations despite ambitions to establish itself as a crypto hub.

Unlicensed Operations

On April 18, VARA issued a written notice to Su Zhu, Kyle Davies, and other co-founders, including OPNX CEO Leslie Lamb. The reprimand highlights their failure to obtain the necessary local license to operate the digital-asset exchange. The authority continues to scrutinize OPNX’s activities and is contemplating further corrective measures to ensure compliance.

Broader Implications

This regulatory action is part of Dubai’s broader initiative to enhance oversight and transparency in its financial sector. The UAE aims to shed its reputation as a jurisdiction that does not adequately monitor illicit financial activities. By tightening regulations, Dubai seeks to remove itself from the global “gray list” and solidify its position as a legitimate financial hub.

OPNX’s Response

Despite the reprimand, OPNX and its leadership, including Leslie Lamb, assert that they have not marketed their services to Dubai or the UAE. Leslie Lamb insists that no UAE customers have opened accounts on the platform. The company is cooperating with regulatory investigations and maintains its belief in compliance with local laws.

Founders’ Involvement

While Su Zhu and Kyle Davies contributed initial ideas for OPNX, Leslie Lamb is responsible for the daily operations as CEO. This delineation of roles underscores the collaborative yet distinct leadership structure within the company.

Dubai’s regulatory developments signal a critical shift toward tightening control over digital-asset exchanges, emphasizing the importance of adhering to local licensing requirements to operate legally within the region.