The post US SEC Sues Crypto Firm Beaxy Digital Over Failure to Register as Securities Exchange appeared first on Coinpedia Fintech News
The United States Securities and Exchange Commission (SEC) has been taking action to regulate the rapidly developing cryptocurrency industry. In recent years, the SEC has been increasing its oversight of the industry, arguing that many tokens and crypto exchanges should be labeled as securities and should be subject to securities laws. In recent news, Beaxy, a crypto platform, was charged by the SEC for reportedly failing to register as an exchange, broker, or clearing agency.
US SEC Dives Deeper into Crypto Exchanges
Beaxy, a cryptocurrency platform, along with its executives, has been charged by the Securities and Exchange Commission for supposedly not registering as an exchange, broker, or clearing agency. This action is the most recent in a series of cryptocurrency-related moves by the U.S. securities regulator.
Additionally, Artak Hamazaspyan, the founder of Beaxy, and Beaxy Digital Ltd, a company he controlled, were charged by the SEC for raising $8 million through an unregistered offering of the Beaxy token. The SEC alleged Hamazaspyan used $900,000 of the raised funds for personal use, including gambling.
According to the SEC, Nicholas Murphy and Randolph Bay Abbott, who are executives associated with Windy, a company that managed Beaxy, were also charged. The SEC alleges Windy violated securities laws through the Beaxy Platform by not registering as an exchange, clearing agency, or broker.
Beaxy Shut Down Its Doors
According to the SEC, Windy entered into an agreement with Brian Peterson and his companies, Braverock Entities, in 2019 to offer “market making services for BXY,” and later one of the companies entered into a similar agreement for another crypto asset security. As a result, Peterson and Braverock were deemed unregistered securities dealers by the SEC.
In response, Windy, Murphy, Abbott, and Peterson agreed to halt all activities as an unregistered exchange, clearing agency, broker, and dealer. They also agreed to close down the Beaxy platform and destroy all BXY in Windy’s possession.
Gurbir Grewal, director of the SEC’s Division of Enforcement, commented:
“To protect investors, there are separate registration requirements for exchanges, brokers, and clearing agencies, with each essentially acting as a check on the other. When a crypto intermediary combines all of these functions under one roof—as we allege that Beaxy did—investors are at serious risk.”
The four individuals and the Braverock Entities agreed to the terms of the agreement without admitting or denying the SEC’s allegations.
The SEC is currently pursuing legal action against Hamazaspyan for securities fraud and against both Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.
According to the statement, users of the exchange can withdraw their assets after canceling all user orders and verifying their balances within 24 hours. It is recommended that users withdraw their assets within 30 days.
All In One Crypto App is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by All In One Crypto App or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risks