The US Securities and Exchange Commission (SEC) has charged crypto trading platform Beaxy and its executives with operating as an unregistered exchange, broker, and clearing agency. The regulator alleged that Beaxy’s founder, Artak Hamazaspyan, and one of the companies he controlled raised $8 million from an unregistered Beaxy token offering.
The SEC further claimed that Hamazaspyan misappropriated over $900,000, using it for activities such as gambling.
According to the SEC, Beaxy’s operations were taken over by Nicholas Murphy and Randolph Bay Abbott in October 2019, who provided the platform for buying and selling crypto assets offered and sold as securities. The regulator alleged that Windy, through the Beaxy Platform, violated the Securities Exchange Act of 1934.
Meanwhile, the SEC also alleged that Windy agreed with Brian Peterson and his companies, which provided market-making services for Beaxy token BXY, to act as unregistered dealers.
Gary Gensler, SEC Chair, said, “We allege that Beaxy and its affiliates performed the functions of an exchange, broker, clearing agency, and dealer without registering with the Commission and complying with clear, time-tested rules governing those activities.”
Following the charges, Beaxy announced on its website that it was suspending its operations. It blamed its decision on the “uncertain regulatory environment surrounding our business” and advised users to withdraw their assets. The SEC has recently increased its regulatory scrutiny of the crypto space and issued an investor notice for crypto investors. It also filed a lawsuit against crypto entrepreneur Justin Sun and his companies.
The move by the SEC is part of its ongoing efforts to monitor and regulate the crypto industry. The regulator has recently been ramping up its industry scrutiny, citing concerns over investor protection and market integrity. The SEC has also been acting against companies that violate securities laws by conducting unregistered offerings and failing to disclose key information to investors.
