OPNX Files Defamation Lawsuit Against Mike Dudas, Issues Justice Tokens

OPNX, the bankruptcy claims exchange tied to the founders of defunct hedge fund Three Arrows Capital, has filed a defamation lawsuit against venture capitalist Mike Dudas, according to Three Arrows co-founder Kyle Davies and New York State court records.

In a summons notice filed in early June, OPNX alleged Dudas published defamatory comments about the company between February and March 2023, around the time that Davies and his partner Su Zhu unveiled their exchange venture. The document does not specify what Dudas’ defamatory comments were.

Dudas, a well-known persona in the cryptocurrency industry, runs 6th Man Ventures and formerly helmed The Block, a crypto media outlet.

“Along with my colleagues at Brown Rudnick, we are proud to represent Mike Dudas in defense of this lawsuit filed by 3 Arrows Capital’s ‘ecosystem partner’ OPNX,” crypto attorney Stephen Palley told CoinDesk. “In order to prove defamation you have to show, among other things, reputational damage. We look forward to seeing how the plaintiff plans to prove that in this case.”

The lawsuit comes as OPNX debuts a new “meme token” called Justice tokens (JT) that it says might benefit crypto communities who have been “harmed by defamation” by giving them a slice of settlements. Earlier this month it launched the first such token called $DUDAS.

In a white paper, OPNX describes JTs as worthless “meme tokens with no intrinsic value, no backing and no expectation of return.” OPNX can “at its sole discretion” decide to gift the proceeds of defamation settlements to some owners of JT tokens: OX token stakers (OX is the native token of OPNX), and also owners of the Miladies NFT.

Miladies NFT owners have suffered “long term defamation” and deserve some upside via JT because of their “persistent promotion of moral virtue in an era where the majority pander to social media algorithms,” according to the white paper.

“Initial JTs will focus on OPNX-specific defamation, then expand to non-OPNX cases,” Davies told CoinDesk.

There are currently 43 wallets holding the DUDAS tokens, according to Etherscan data, although there is insufficient liquidity to trade them on Uniswap.

OPNX posited in the white paper that defamation cases in the crypto industry negatively impact entire communities of token holders; these communities should therefore benefit from “any settlements.” Justice tokens can be a “mechanism” to get that value to anyone impacted.