The SEC, the main US financial regulator, is continuing its crackdown on crypto companies. Recently, it brought charges against the exchange platform Beaxy Digital Ltd and its executives, including its founder Artak Hamazaspyan. Faced with this threat, the Exchange had to suspend its operations in the United States.
SEC accuses Beaxy and its co-founder of selling unregistered securities
A month after initiating a lawsuit against Kraken because of its staking program, the SEC continues its repressive policy by initiating a new lawsuit. This time, against the exchange platform Beaxy and its founder.
The SEC a deposited eight counts in the U.S. District Court for the Northern District of Illinois in Chicago, forcing the platform to suspend operations. Tuesday, March 28, Beaxy announced on his blog that it was suspending operations due to the uncertain regulatory environment.
One day after this announcement, the SEC disclosed a press release indicating that it was suing Beaxy and its leaders. The U.S. regulator accuses them of failing to register as a national securities exchange, broker and clearing agency.
Beaxy and its affiliates performed the functions of an exchange, broker, clearing agency, and dealer without registering with the Commission and without complying with clear and proven rules governing those activities.Gary Gensler, SEC Chairman
According to the SEC, Artak Hamazaspyan, founder of Beaxy would have raised $8 million through an unregistered token offering. Also, Hamazaspyan allegedly misappropriated nearly $900,000 of investor funds for personal use, including gambling.
SEC expands investigation of Beaxy by charging other company executives
The SEC did not hesitate to take firm action against the leaders of Beaxy and their associates. It charges Nicholas Murphy and Randolph Bay Abbott for violating the securities laws by using their company Windy Inc to take control of the stock market.
According to the allegations of the SEC, Windy Inc took control of Beaxy in 2019 after the alleged embezzlement of funds by the founder. Platform executives, Nicholas Murphy and Randolph Bay Abbott, would have continued to use the platform to trade crypto-assets commercialized and sold as securities.
In addition, Windy Inc. has entered into a pact with Brian Peterson and his cronies to provide market services to Beaxy without even registering with the SEC.
The defendants buckled under the pressure and agreed to close Beaxy to return customer funds, burn BXY tokens and pay fines.
Customers will be able to withdraw their assets within 24 hours of all orders being cancelled and balances verified. The SEC encourages clients to make withdrawals within 30 days of the transaction.
It’s clear that the Securities and Exchange Commission won’t stop until it brings every crypto company in the United States to its knees. Still, it’s nice to see it sometimes actually care about consumer protection. Goodbye Beaxy.
CEO and Editor-in-Chief of Coinpri I have been navigating the waters of Blockchain for 5 years already.
Wait, I can see the Promised Land of Adoption in the distance.