Beaxy exchange shutters after SEC presses multiple charges against founder, execs
Beaxy suspended operations on March 28 “due to the uncertain regulatory environment surrounding our business,” according to the cryptocurrency exchange’s blog. The suspension came a day before the United States Securities and Exchange Commission (SEC) announced it was charging Beaxy and its executives with failing to register as a national securities exchange, broker and clearing agency.
The SEC also said it was charging Beaxy founder Artak Hamazaspyan and Beaxy Digital, a company he controls, with raising $8 million through an unregistered offering of the Beaxy token (BXY) and misappropriation by Hamazaspyan of $900,000 of investor funds for personal uses.
In addition to those charges, the agency is charging market makers operating on the Beaxy platform as unregistered dealers. SEC chair Gary Gensler said in a statement:
The SEC said is litigating its charges against Hamazaspyan for securities fraud and against Hamazaspyan and Beaxy Digital for the unregistered BXY offering. According to his LinkedIn profile, Hamazaspyan left Beaxy in September 2019 and is located in Yerevan, Armenia.
SEC is incrementally building a body of legal theories to target crypto asset intermediaries. It’s not only focused exchanges. Beaxy complaint shows SEC is scrutinizing market making arrangements as broker-dealer activity and certain custody arrangements as clearing activity.
The SEC has also alleged that Windy Inc., which operated the exchange after the departure of Hamazaspyan, and exchange co-presidents Nicholas Murphy and Randolph Bay Abbott committed securities violations. Beaxy chairman Brian Peterson and companies associated with him allegedly acted as unregistered dealers.
Related: Beaxy Launches Crypto Trading Platform Despite Hack
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