Crypto exchange Beaxy shuts down following SEC charges

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Key Takeaways

  • SEC has charged the Beaxy Platform and its executives for failing to register as a broker, national securities exchange, and clearing agency.
  • SEC accused Beaxy founder Artak Hamazaspyan for raising around $8 million in an unregistered offering of the BXY token while also alleging that Hamazaspyan misappropriated at least $900,000 for personal use

Crypto trading platform Beaxy has closed down its operations following the SEC crackdown, citing an “uncertain regulatory environment.”

‘We forthrightly committed to cooperation with the SEC for over two years, continually providing information, data, and interviews to assist regulators in whatever manner we could. Unfortunately, despite our best efforts, it has become clear that the regulatory environment is just too uncertain to continue operations”, Beaxy’s statement reads.

The shutdown follows a few hours after the Securities and Exchange Commission charged the Beaxy Platform and its executives for failing to register as a national securities exchange, clearing agency, and a broker.

In its official statement, the SEC had further accused Beaxy founder Artak Hamazaspyan and Beaxy Digital, Ltd of raising $8 million in an unregistered offering of the Beaxy token (BXY).

The regulator also claims that Hamazaspyan misappropriated at least $900,000 for personal use, including gambling.

The regulatory watchdog’s complaint also states that since October 2019, Nicholas Murphy and Randolph Bay Abbott, through Windy Inc., maintained the Beaxy Platform as a web-based trading firm that facilitated buying and selling of cryptocurrency assets that were offered and sold as securities.

The SEC complaint against the crypto trading firm contains eight counts against Hamazaspyan, Murphy, Abbott, and Peterson, as well as companies Windy Inc., Beaxy Digital, Braverock Investments, Future Digital Markets, Windy Financial, and Future Financial. 

“When a crypto intermediary combines all of these functions under one roof – as we allege that Beaxy did – investors are at serious risk,” Gurbir Grewal, SEC’s enforcement chief, said in the official statement.

 “The blurring of functions and the lack of registrations meant that regulations designed to protect investors were not followed or even recognized by Beaxy.”

The latest move by SEC is part of its efforts to ramp up crypto enforcement actions. Earlier this year, crypto exchange Kraken agreed to shut its crypto-staking operations to settle charges with the SEC. Last week, SEC also issued crypto exchange Coinbase a Wells notice, warning the Platform that it identified potential violations of U.S. securities law.

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Saniya Raahath
Saniya Raahath

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