The launch of OPNX in early April caused quite a stir in the cryptocurrency community. Many enthusiasts left facepalming in frustration and anger boiling over among crypto market players.
OPNX crypto exchange: Mission (im)possible?
As part of its launch, the platform hosted a giveaway of its native FLEX token. CEO Leslie Lamb announced that clients can now trade both crypto and futures on the exchange. To sweeten the deal, starting conditions include a generous 30% partner commission and a discount of up to 50% on trading fees with FLEX. In addition, there are plans to launch trading for tokenized claims against failed platforms such as FTX, Celsius, and others. However, OPNX’s reach is limited. According to their statement, the exchange will not be available to users from several regions, including the United States, Canada, and some African countries.
It should be noted that the FLEX token (with a market capitalization of nearly $100 million as of the end of April 2023) was inherited by OPNX from the cryptocurrency exchange Coinflex. Coinflex CEO Mark Lamb decided to relaunch his business and teamed up with cryptocurrency entrepreneurs Su Zhu and Kyle Davis to rebrand the platform. However, recent events suggest that this might have been a big mistake.
Three Arrows Capital: A brief tale of downfall
It turns out that Su Zhu and Kyle Davis already had a failed project in their portfolio – the bankrupt hedge fund Three Arrows Capital.
Zhu and Davis were classmates, studying together at Phillips Academy and Columbia University, before briefly working at Credit Suisse. Their company, Three Arrows Capital, started out specializing in arbitrage of emerging-market currency derivatives. However, this strategy only yielded fractional dollar returns. In 2017, the owners switched to cryptocurrency.
Outwardly, things seemed to be going well. Shortly before its bankruptcy in the summer of 2022, Three Arrows claimed its net asset value was $18 billion. However, it was later revealed that a large portion of this sum consisted of unsecured loans from various credit platforms. Nevertheless, the Three Arrows fund supported Aave, Avalanche, Ethereum, Polkadot, Solana, and other crypto projects. It’s clear that Zhu and Davis’s fatal mistake was their bet on the LUNA token, which turned out to be a scam. They invested about $200 million in it. The collapse of Three Arrows caused a wave effect of bankruptcies in the crypto market. For example, the notorious Sam Bankman-Fried, CEO of FTX, accused Zhu and Davis of the financial demise of Voyager Digital and the decline of Blockchain.com’s business. Creditor claims against Three Arrows totaled over $3.5 billion.
Things went awry for OPNX almost immediately. The media published information that the trading volume on the exchange for the first 24 hours of operation was a meager $1.26. However, OPNX strongly refuted this fake news. In reality, the total trading volume was only $13!
Furthermore, things got even funnier. The crypto exchange reported an increase in trading activity in its next tweet.
It’s obvious that the concept of “Low base effect” is not well understood on this cryptocurrency exchange.
The next rookie mistake made by OPNX was related to the list of project investors posted on their Twitter account. Among the listed investors were Taiwanese venture company AppWorks, trading firm Susquehanna, the venture arm of global trading firm DRW, the MIAX Group exchange, the Hong Kong branch of China Merchant Bank, Hong Kong-based investment fund Token Bay Capital, venture company Nascent, and the Tuwaiq Fund from Saudi Arabia.
As a result, a significant number of the companies mentioned either denied or distanced themselves from OPNX’s claim. DRW, Nascent, MIAX, and Susquehanna, in particular, disavowed the exchange. Some companies choose not to comment on OPNX’s tweet and respond to press inquiries.
It’s safe to say that the crypto exchange CEO felt the heat.
It seemed like Leslie was in for some intense experiences at least until the summer. However, it wasn’t even a few days before Lamb wrote a lengthy post accusing the entire crypto community. It turned out that just in the last week, she had been subjected to hundreds of racist and sexist comments. Countless people sexually harassed her and called the CEO a figurehead. “It’s no surprise that only ~4.1% of crypto founders are female,” Leslie lamented.
As anticipated, Leslie received more than just sympathy. Certain members of the crypto community pointed out that she was employed by Three Arrows Capital, a company involved in fraudulent activities and owing billions of dollars to creditors. Meanwhile, others advised her to depart from the industry entirely before the OPNX project becomes permanently embroiled in scandalous affairs.