CoinDesk Consensus

The U.S. Securities and Exchange Commission (SEC) has indicted cryptocurrency trading platform Beaxy and its executives (including founder Artak Hamazaspyan) for failing to register as a national stock exchange.

In a March 29 statement, the financial regulator claimed that Hamazaspyan and one of his controlled companies had raised $8 million from an unregistered Beaxy token (BXY) offering. The SEC added that the exchange’s founder misappropriated more than $900,000 of his money used for gambling and other purposes.

Nicholas Murphy and Randolph Bay Abbott took over operations of Beaxy through the company Windy in October 2019, according to the SEC. The two allegedly provided his Beaxy as a platform. ”

“The complaint alleges that Windy violated the Securities Exchange Act of 1934 through the Beaxy platform.”

Meanwhile, the SEC further stated that Windy provided market-making services to Brian Peterson and his companies (Braverock Investments LLC, Future Digital Markets Inc., Windy Financial LLC, Future Financial LLC) (collectively, the Braverock Entity). claimed to have signed a contract to for BXY.

Thanks to this, regulators took note that Peterson and his company acted as unregistered dealers.

SEC Chairman Gary Gensler Said:

“We do not believe that Beaxy and its affiliates operate exchanges, brokers, clearinghouses and dealers without registration with the Commission and without adherence to clear and proven rules governing these activities. I claim to have done it.”

Meanwhile, March 28th statement Beaxy’s website indicated that it was suspending operations.

The crypto firm has blamed its decision on the “uncertain regulatory environment surrounding our business.” It added that trading on the platform was immediately suspended and users were advised to withdraw their assets.

The SEC recently increased its regulatory oversight of the crypto space. The financial regulator recently issued an investor notice for cryptocurrency investors. Regulators have also filed a lawsuit against crypto entrepreneur Justin Sun and his company.

By Jules

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