The cryptocurrency landscape is always changing, and it seems like every day there are new cryptocurrency exchanges popping up. Unfortunately, not all of them make it, and they end up closing later on.
Today, we bring you the news that the OPNX exchange is closing and why. We also have information in this article for current customers. Read on to learn more.
What is the OPNX Exchange?
The OPNX cryptocurrency exchange (OPNX stands for Open Exchange) was launched by the Three Arrows Capital hedge fund in April 2023. It was founded by Su Zhu and Kyle Davies. OPNX was created for the trading of cryptocurrency derivatives, allowing investors to make money off the unfortunate financial situations of others(such as the FTX Bankruptcy).
Su Zhu and Kyle Davies were busy with Three Arrows Capital Hedge Fund at conception and left the exchange in the capable hands of CoinFLEX CEO Mark Lamb. Unfortunately for Lamb, he was later sued as a result of his position—leading to further financial troubles for the exchange.
It was reported that $25 million was raised for the creation of OPNX, but the investors were never publicly named, leading many to believe that the money was never there. Plus, with the failing reputation of Zhu and Davies at the time of conception, many suspect that no reputable companies would have been willing to give them the money.
When is OPNX Closing?
On February 2nd, 2024, it was announced that the OPNX exchange will cease operations entirely and close by February 14th. This is just a few days away, not giving current customers much time to make adjustments.
A press release by Three Arrows Capital states that on February 7th, 2024, at 8 am UTC, any remaining positions will be settled in preparation for the closing of the exchange.
Why is OPNX Closing?
Three Arrows Capital hedge fund failed in 2023, so it really isn’t a surprise that the exchange created by the hedge fund would also go under. Especially because a lawsuit was opened in regard to the fund, and it was not dismissed as the exchange creators hoped it would be. In fact, the court case against Three Arrows Capital was settled in favor of Defiance Capital, with the judge ordering the creators of Three Arrows to pay the defendant $140 million in damages.
Additionally, OPNX was created in a very niche industry that is very volatile, and the bad press has tanked the owner's reputation to the point where getting new customers for their exchange was next to impossible.
Pair this with the changing financial situation in the United States and across the globe, and it becomes apparent that the exchange was no longer profitable, nor was it making enough money to stay afloat. Therefore, the owners decided to close it immediately.
Related: The Collapse of Three Arrows Capital Hedge Fund
What Do Customers of OPNX Need to Do?
It is never a good day when a platform you invest on regularly announces that it is closing. It’s even worse in a situation like OPNX when you only have days to settle your affairs before the platform closes.
Below are steps that all OPNX customers need to take ASAP:
1. Settle Any Open Positions
Customers of OPNX need to close or settle any open positions they maintain by February 7th, 2024.
2. Withdraw Your Funds
After closing any open positions, any funds that you have on a hot wallet on the site need to be withdrawn. After February 14th, the withdrawal feature will be disabled, and you will have to jump through hoops to get your money back.
3. Download Transactional History
By law, any cryptocurrency trading you do must be reported for your taxes. Because the site is ceasing operation, they will no longer maintain this information for authorities. Customers must log on and download any historical data for their own records.
If you need help completing any of these steps, you can reach out to OPNX customer service for assistance.
What If You Are Too Late?
Did you find this article on February 15th, 2024? Don’t panic just yet. As mentioned above, all your open positions were automatically settled on February 7th. Now, you will have to contact the OPNX team to withdraw your money. Unfortunately, your transaction history may have been lost, though you can speak with customer service as to what can be done about it.
While OPNX will likely maintain a customer service team until the end of the month, if you have found this article later in the year, it might be a challenge to get your money back. We don’t have any specific advice in this situation, other than to try and contact the OPNX founders on LinkedIn or another social media platform for assistance. There also might be some emails from OPNX in your junk mail folder letting you know your options.
Related: All About Decentralized Finance (DeFi) Investing
Why Do So Many Crypto Exchanges Go Under?
Unfortunately, the cryptocurrency exchange industry is volatile. Not only do you usually have to fund a project on your own (or rely on sketchy institutional investors), but you also have to hope that the cryptocurrency industry continues to boom. The last two years (2022 and 2023) have been very rough on cryptocurrency, and, as a result, many firms in the area are starting to go under.
There is also the added pressure of the gray regulations governing cryptocurrency businesses. As these regulations shift and change, many companies are faced with lawsuits that force them to close or cease business dealings. Some individuals who open these companies are even jailed for their involvement.
Overall, we aren’t surprised that OPNX is closing, in fact, we were more shocked that Zhu and Davies even attempted to open one when they did. We just hope that any customers of the platform can withdraw their money and close their account while it is still easy to do so.
You May Also Enjoy: The Fall of FTX
This article was brought to you by the Bitcoin Dice on MintDice. Originally posted to the MintDice Blog.