The founders of collapsed hedge fund Three Arrows Capital (3AC) have found themselves in hot water with Dubai’s crypto regulator over their new project.

Kyle Davies and Su Zhu, the co-founders of 3AC, were among five people issued with a written reprimand by Dubai’s Virtual Assets Regulatory Authority (VARA) in relation to the recently-launched Open Exchange (OPNX).

The site, which went live last month, has been offering virtual asset exchange services without securing any regulatory licenses, according to a statement from VARA.

OPNX offers spot and futures trading and has also said it will launch a service allowing investors to trade bankruptcy claims for insolvent platforms like FTX and Celsius.


VARA officials say they issued OPNX and its founders with a Cease and Desist order in February, which resulted in some restrictions being applied regarding residents of Dubai and the rest of the United Arab Emirates (UAE). However, they were not applied comprehensively across all communication channels, leading to a second Cease and Desist notice in March.

OPNX then launched its exchange on 4 April, prompting VARA to issue an Investor and Marketplace Alert on the subject, before sending the written reprimand on April 18.

Mark Lamb and Sudhu Arumugam, who co-founded the business with Davies and Zhu, were also addressed in the reprimand, as was OPNX CEO Leslie Lamb.

“Following the launch, and with the continued lack of satisfactory remedial action by the responsible parties, VARA is continuing to actively monitor the situation and investigate OPNX's activity to assess further corrective measures that may be required to protect the market,” the regulator said in its statement.


Decrypt has reached out to OPNX for comment regarding Dubai’s action.

CoinFlex, 3AC founders team up

Plans for OPNX first became public in January, when a leaked pitch deck showed that the four founders were looking to raise $25 million and would call the new exchange GTX “because G comes after F,” in a reference to the collapse of FTX. The name was later changed.

The project is a collaboration between 3AC’s founders and the founders of the derivatives exchange CoinFLEX, which is currently in the process of restructuring.

OPNX uses CoinFLEX’s native token FLEX, while its CEO Leslie Lamb is both chief marketing officer at CoinFLEX and married to Mark Lamb.

3AC imploded last summer after sustaining heavy losses from the collapse of the Terra ecosystem. It was once one of the largest crypto-centric hedge funds.

In the “about us” section of OPNX’s website, the founders point to the troubles of their previous ventures as positives.

“We believe that founders who reach great heights and then fall learn the most important lessons and, therefore, have the most to contribute,” the page says. “Our responsibility is to use the wisdom gained to build a more robust, open, and transparent financial world for everyone.”

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