The cryptocurrency platform Beaxy and its management have been charged by the Securities and Exchange Commission (SEC).
The banking watchdog’s continuous, ruthless onslaught on crypto companies doing business in the United States continues with this latest move. The SEC also filed charges against Chicago-based Beaxy Digital Ltd. for allegedly generating $8 million through the sale of unregistered securities using its BXY token.
The SEC also filed charges against the founder Artak Hamazaspyan for misappropriating $900,000 for his personal use, which included gambling. Two additional executives, Nicholas Murphy and Randolph Bay Abbott, who supervised a business called Windy that was in charge of managing Beaxy, were also named as defendants in the lawsuit along with Artak.
By conducting transactions through the Beaxy platform without first registering as an exchange, clearing agency, or broker, the SEC claims that Windy violated securities laws.
Following the complaint, the cryptocurrency exchange abruptly declared on its website that it has decided to cease operations, citing the “uncertain regulatory environment around our business.” As a direct result of this, the platform’s native coin, BXY, has lost some of its utility, upsetting investors.
Gary Gensler, the head of the SEC, was quoted as saying the following in reference to the ongoing raids on multiple cryptocurrency companies, including Beaxy: This lawsuit serves as yet another reminder to cryptocurrency intermediaries that they should conform to legal requirements and modify their business strategies rather than the other way around.
Customers of the exchange are permitted to withdraw their funds after 24 hours of the closing of all open orders and the verification of all balances, according to Beaxy’s official statement. The agency’s accusations against the suspects have not been confirmed or refuted by them.
