Opyn Co-Founders Step Down Amid Regulatory Pressures

The co-founders of Opyn, a prominent DeFi options protocol, have announced their departure from the company and the crypto industry.

This decision comes in the wake of charges filed against Opyn by the Commodity Futures Trading Commission (CFTC) in September.

Opyn’s Co-founders Announce Departure from Crypto

Opyn co-founders CEO Zubin Koticha and Alexis Gauba recently announced their departure from the crypto world. Koticha, in a post on X, stated, “After the regulatory action against Opyn, Alexis and I are leaving crypto.”

Hey Crypto Twitter,

It’s been a while

This one’s a tough one…

After the regulatory action against Opyn, @alexisgauba and I have made the decision that we are leaving crypto.

This is honestly really emotional for me and Alexis.

— zubin koticha (@snarkyzk) November 14, 2023

Koticha expressed his disappointment and surprise at the events, stating, “We spent the last six years working on incredible stuff that would’ve never been possible in TradFi — cutting-edge work on the forefront of structured products and derivatives. We thought we were going to be in crypto for the rest of our lives. But, unfortunately and unexpectedly, this is the end of the road.”

Andrew Leone, previously a vice president at Nomura specializing in VIX and structured volatility trading, is set to take over as Opyn’s new CEO. Koticha described Leone as an MIT-engineered Wall Street derivatives trader, a DeFi algorithmic market maker, and an “absolute baller” akin to a third co-founder. As such, Leone’s diverse expertise makes him a strong leader for Opyn’s next chapter.

Koticha also hinted at exciting developments under Leone’s leadership but left the specifics for the latter to reveal. He closed his announcement with a teaser about his and Gauba’s next venture, promising to share details soon.

CFTC Fines Opyn $250,000 for Regulatory Violations

The CFTC filed and settled charges against Opyn and two other DeFi entities for multiple violations in September. These included registration failures, not adopting a customer identification program, and offering leveraged and margined retail commodity transactions in digital assets without proper authorization.

Following the charges, Opyn was fined $250,000 and ordered to cease and desist from violating the Commodity Exchange Act and CFTC regulations.

Opyn, based in California, is known for its innovative blockchain-based digital asset protocol. It developed a derivative token called oSQTH, which tracked the price of ether squared relative to the USDC stablecoin.

However, the CFTC found that these tokens were, in fact, swaps and leveraged or margined retail commodity transactions that should have only been offered on a registered exchange per the Commodity Exchange Act and agency regulations.