OPNX has declared it will cease all activities next month. This decision comes as co-founders Su Zhu and Kyle Davies grapple with legal repercussions stemming from their previous venture’s failure, Three Arrows Capital.
OPNX to Shut Down Amid Three Arrows Co-Founders’ Legal Troubles
Open Exchange (OPNX), a platform unique for trading bankruptcy claims alongside its crypto exchange operations, has announced it will cease all operations by Feb. 14. The closure comes after a tumultuous period for the co-founders, Kyle Davies and Su Zhu, who are also known for their involvement in the collapse of the Singapore-based crypto hedge fund, Three Arrows Capital (3AC).
According to an email sent to OPNX users, the exchange has urged its clientele to close all positions by Feb. 7 and to ensure that all funds are withdrawn by the shutdown date of Feb. 14, after which the withdrawal functionality will be disabled. This news has sent shockwaves through the crypto community, with the platform’s native OX token experiencing a precipitous 38% drop in value within an hour of the announcement.
OPNX was established after the bankruptcy of 3AC, which was once a $10 billion hedge fund that collapsed in June 2022 amidst the broader crypto market downturn. OPNX offered a novel approach by allowing users to trade creditor claims of bankrupt crypto companies, a service that became increasingly relevant as the industry faced a growing number of insolvencies.
The downfall of 3AC and the subsequent launch of OPNX were marked by controversy and legal challenges for Zhu and Davies. The duo faced intense scrutiny and legal actions, including a dramatic moment when they were subpoenaed via messages on social media platform X by Teneo, the firm tasked with liquidating 3AC’s assets. Teneo’s efforts were complicated by the founders’ initial disappearance and their alleged concealment of their whereabouts.
Further complicating matters, Singapore’s central bank issued nine-year prohibition orders against Davies and Zhu in September 2023 for alleged violations of the country’s securities laws related to their operations at 3AC. Su Zhu was apprehended in Singapore airport and sentenced to four months in prison for failing to cooperate with bankruptcy proceedings. Additionally, a British Virgin Islands court froze more than $1 billion in assets tied to Zhu, Davies, and Davies’ wife, Kelly Chen, as legal proceedings against them continued to unfold.
Will Su Zhu and Kyle Davies attempt to launch another project? Share your thoughts and opinions about this subject in the comments section below.
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