OPNX – the project created by the defunct hedge fund Three Arrows Capital (3AC) founders – has been controversial from the very start. The exchange has now been reprimanded for conducting unregulated activity.

Dubai’s Virtual Assets Regulatory Authority (VARA) has issued a written reprimand to five OPNX founders, including Kyle Davies and Su Zhu, for carrying out virtual asset exchange services on an unregulated basis in and from the Emirate of Dubai as well as engaging in marketing, promotion and/or advertisement of OPNX services and its native token (FLEX) without the necessary permits from the regulator.

OPNX Under Dubai Regulator’s Scrutiny

According to an official update, VARA said it became aware of OPNX soliciting and collecting personal data from the public to participate in its new exchange. It further added that the platform had been engaged in marketing the exchange without setting up warranted restrictions for the residents of Dubai and the United Arab Emirates (UAE).

Upon investigation of OPNX, the authorities issued two cease-and-desist orders to the founders even before its launch. A week after the official rollout of OPNX, VARA alerted investors that the platform was unregulated.

“VARA notes that thereafter, certain restrictions regarding residents of Dubai/UAE were subsequently applied on the OPNX website. Such restrictions were, however, not applied comprehensively across all OPNX communication channels or promotional and marketing materials – that have consequently, remained accessible to UAE residents thereafter.”

The regulator is currently monitoring the situation and investigating OPNX’s activity to assess further corrective measures as a result of the “continued lack of satisfactory remedial action” by the operators of the crypto platform.

Heated Argument With “Investors”

Several community members have expressed their frustration over the new project primarily because it was founded by the same people who started the now-failed crypto hedg