Beaxy, a cryptocurrency exchange, has closed after an SEC lawsuit

Gary Gensler, the Head of the Securities and Exchange Commission, has regularly railed against businesses that operate numerous lines of business, arguing that they should always be registered separately as independent businesses. Companies should segregate their commercial operations and register them separately, according to Gensler.

The SEC has recently increased enforcement against the bigger industry players, including the recent notification of Coinbase Global Inc. of its plan to sue Coinbase Global Inc. based on the company’s sale of unregistered digital assets and other products without the required registration.

In connection with its continuing inquiry into cryptocurrency exchange, brokerage, and clearing services run concurrently by, the Securities and Exchange Commission has now taken action against a cryptocurrency platform for the first time.

The markets watchdog is also suing Artak Hamazaspyan, the creator of Beaxy, for securities fraud. According to a statement released by the SEC on Wednesday, Hamazaspyan allegedly stole $900,000 from the company’s cryptocurrency token, BXY, to gamble and spend the money in other ways. Via the sale of its cryptocurrency token, BXY, the corporation made $8 million.

Investors are in severe danger when a cryptocurrency intermediary combines all of these tasks under one roof, as Beaxy allegedly did, according to Gurbir Grewal, the SEC Enforcement Director. Beaxy has stated that because of the blending of functions and the absence of registrations, it did not follow or even recognize rules that were intended to safeguard investors.

The organization also disclosed that the people currently in charge of managing Beaxy, Nicholas Murphy and Randolph Bay Abbott, had agreed with those who were formerly in charge of doing so. The SEC claimed in its statement that the two took over the platform from Hamazaspyan and ran it through their business Windy Inc. even though they weren’t registered, the agency added. Additionally, it was claimed that companies belonging to Brian Peterson’s group, including Braverock Investments LLC, were acting as market makers for the platform while allegedly acting without registering.

None of the businesses or people connected to the latter group acknowledged or refuted the accusations leveled against them. Peterson and his businesses reached an $86,000 settlement, and Windy, Abbot, and Murphy voluntarily agreed to pay $79,200 in civil fines.

The firm declared on its website on Wednesday that it has stopped operating, citing one of the reasons for its closure as being the unpredictability of the legal climate in which the company’s business operates.

After putting this issue behind them, Yankun Guo and Timothy Belevetz, attorneys at Ice Miller who represent Windy, Abbott, Murphy, Peterson, and Braverock, said in a statement sent to us via email: “Our clients are excited that the development of cryptocurrencies and blockchains is continuing and that their integration into international regulated markets is being further developed.

The selling of unregistered BXY tokens led to a securities fraud case being brought by the Securities and Exchange Commission against Hamazaspyan and the business he formerly owned, Beaxy Digital, Ltd. Hamazaspyan did not immediately reply to a request for comment.‍ 

The fact that Beaxy closed by a court-approved settlement with Windy and others connected to that business is not mentioned in the SEC’s statement. The agreement mandated “destroying” any BXY in Windy’s custody as well as returning all assets to consumers. According to the SEC, Beaxy Digital and Hamazaspyan are still the targets of legal action.

Following the cancellation of all user orders and the verification of balances, customers of the exchange will be allowed to withdraw their funds within 24 hours, and they are advised to do so within 30 days, according to the SEC.

I am Vishal. I post articles about the cryptocurrency markets. I'm pursuing a BBA degree. My home is in Navi Mumbai, Maharashtra.I'm constantly interested in new advancements in this industry and I learn something new about it every day. I would love to share such information with you all.

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