Crypto Exchange Beaxy Shuts Down in Wake of SEC Lawsuit

Beaxy Cryptocurrency Exchange Closes After SEC Suit

Beaxy, a cryptocurrency exchange, has shut down after more than three years of business. Beaxy said that it has been immediately halting its services from the Beaxy Exchange “due to the uncertain regulatory environment surrounding our company” in a statement that was posted on its website on Tuesday.

In a news release released on Wednesday, the SEC said that it has filed legal charges against the cryptocurrency exchange’s founder, Artak Hamazaspyan, and their company, Beaxy Digital Limited, for generating $8 million through an unregistered issuance of the Beaxy token (BXY). In addition, Hamazaspyan was accused by the securities regulator of “misappropriating at least $900,000 for private use, including gambling.”

Furthermore, in a case submitted to an Illinois district court, the US securities commission charged that Brian Peterson and his companies had served as unregistered brokers by acting as market makers for Beaxy. Speaking on the case, SEC Division of Enforcement Director Gurbir S. Grewal pointed out that companies wishing to function as exchanges, brokers, or clearing agencies must adhere to different registration criteria. The purpose of these regulations is to safeguard investors and provide a system of checks and balances between the different companies.

According to Grewal, “the lack of registrations and the blurring of features suggested that laws built to protect investors are not being utilised and even acquiesced by Beaxy.”

Windy, Murphy, Abbot, and Peterson have chosen to close the cryptocurrency trading platform, repay all customers, and destroy “any and all Beaxy tokens in Windy’s possession,” according to the SEC’s response to the lawsuit. The parties have consented to pay the SEC a variety of fine amounts without acknowledging or disputing the accusations. This includes Windy, Abbott, and Murphy paying $79,200 in civil fines.

The SEC further declared that it will pursue legal action against Hamazaspyan for securities fraud as well as against the president and Beaxy Digital for BXY’s unregistered offering. All client assets stored on Beaxy’s system will be accessible for withdrawal “within a day likely after individual requests are completed and balances validated,” the company stated in a statement. “With immediate effect, trading has been halted on the system to expedite the withdrawal and reconciliation procedure. Beaxy declared, “We firmly advise you to withdraw any remaining assets within thirty days in order to avoid needless complications and delays.”

The SEC took action against Beaxy one week after Justin Sun, the owner of three cryptocurrency businesses, was accused by the regulator of engaging in wash trades with the Tronix (TRX) coin. Eight American celebrities were also charged by the financial watchdog for endorsing TRX and/or BitTorrent tokens without revealing that they were compensated to do so. Separately, Binance was charged by the US derivatives authority for operating an unauthorised exchange for digital asset derivatives. The biggest cryptocurrency exchange in the world was also charged by the watchdog with “numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.”

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