SEC charges force crypto exchange Beaxy to close operations SEC charges force crypto exchange Beaxy to close operations
Beaxy said the regulatory environment was too uncertain for it to continue operations despite its two-year corporation with the SEC.
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Updated: Jul. 20, 2023 at 2:38 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The U.S. Securities and Exchange Commission (SEC) has charged crypto trading platform Beaxy and its executives — including the founder Artak Hamazaspyan — for failing to register as a national securities exchange.
In a March 29 statement, the financial regulator alleged that Hamazaspyan and one of the companies he controlled raised $8 million from an unregistered Beaxy token (BXY) offering. The SEC added that the exchange’s founder misappropriated over $900,000 that was used for things like gambling.
According to the SEC, Nicholas Murphy and Randolph Bay Abbott took over the running of Beaxy through their company Windy in October 2019. The duo allegedly provided Beaxy as a platform “that facilitated buying and selling of crypto assets that were offered and sold as securities.”
“The complaint alleges that Windy, through the Beaxy Platform, violated the Securities Exchange Act of 1934.”
Meanwhile, the SEC further alleged that Windy entered into an agreement with Brian Peterson and his companies — Braverock Investments LLC, Future Digital Markets Inc., Windy Financial LLC, Future Financial LLC (collectively, the Braverock Entities) — to provide market-making services for BXY.
By virtue of this, the regulator noted that Peterson and his companies acted as unregistered dealers.
SEC Chair Gary Gensler 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.”
Meanwhile, a March 28 statement on Beaxy’s website showed it was suspending its operations.
The crypto firm blames its decisions on the “uncertain regulatory environment surrounding our business.” It added that trading on its platform had been halted immediately and advised users to withdraw their assets.
The SEC has recently increased its regulatory scrutiny of the crypto space. The financial regulator recently issued an investor notice for crypto investors. The regulator also filed a lawsuit against crypto entrepreneur Justin Sun and his companies.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.
Justin Sun has carved a name for himself as a leading figure in the blockchain sector.