Open Exchange Fined $2.7 Million for UAE Crypto Violations

cryptocurrency regulation

Dubai has fined cryptocurrency firm Open Exchange nearly $3 million for violating its digital asset rules.

The country’s Virtual Assets Regulatory Authority (VARA) said in a regulatory notice Tuesday (Aug. 15) that a fine of 10 million dirhams (about $2.7 million) levied against Open Exchange (OPNX) in May has still not been paid.

The company — a venture from the founder of failed crypto hedge fund Three Arrows Capital — already paid earlier 200,000 dirhams (about $54,000) fines for four people within the company for failing to adhere to Dubai’s rules for marketing, advertising and promoting crypto.

“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,” the regulator said in the notice.

At one time, Three Arrows was one of the most prominent firms in the crypto sector, but it had to file for bankruptcy last summer following a selloff in assets, which was triggered in part by the collapse of the Terra blockchain.

VARA has been stepping up its crypto enforcement as the United Arab Emirates tries to escape the “gray list” of countries the Financial Action Task Force (FATF) said don’t do enough to ferret out illicit funds Bloomberg reported Wednesday (Aug. 16).

Still, crypto companies have embraced the UAE of late. Coinbase said in May it was considering the country as a possible international hub. CEO Brian Armstrong said the UAE’s approach to regulating crypto has “been more forward-thinking than the U.S.”

OPNX, meanwhile, expanded its platform last month to include FTX claims, a move the company said gives holders of FTX bankruptcy claims the opportunity to unlock their locked liquidity by selling the claims or turning them into collateral to trade crypto futures.

The offering is designed to help individuals who have locked liquidity because of FTX’s bankruptcy proceedings. While over-the-counter (OTC) markets can allow some to liquidate their claims, their legal and intermediary fees limit this solution to large creditors.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.