Beaxy Suspends Services After SEC Presses Charges Against the Firm and Its Execs

Shortly after the Securities Exchange Commission (SEC) filed a lawsuit against crypto exchange Beaxy, it suspended its services.

On March 29th, SEC charged crypto exchange Beaxy with failure to register as "a national securities exchange, broker, and clearing agency."

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The lawsuit also accused Beaxy's founder Artak Hamazaspyan and Beaxy Digital of "raising $8 million in an unregistered offering of the Beaxy token (BXY)" and using at least $900,000 for personal use, such as gambling.

Lastly, the SEC charges touched on "market makers operating on the Beaxy Platform as unregistered dealers."

The SEC lawsuit also alleges that after Windy Inc. took over Beaxy in 2019, they continued to use the platform to trade unregistered securities illegally. Windy agreed to pay $79,000 in fines without admitting or denying the SEC’s allegations.

While it has reached a settlement with Windy Inc, the SEC is still pursuing charges of securities laws violations against Hamazaspyan.

The man left the company in 2019 and is currently in Yerevan, Armenia. It is unclear if SEC intends to extradite him. However, it is worth noting that Armenia does not have an extradition treaty with the US.

When talking about the new charges, SEC Chair Gary Gensler noted:

Our securities laws for decades have served to protect investors, make capital formation easier and cheaper, and improve our markets. This case serves as yet another reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around.

Shortly after the charges were announced, crypto exchange Beaxy suspended all operations, citing regulatory uncertainty. According to the SEC, the crypto exchange had agreed to cease all operations.

In its announcement, Beaxy urged customers to withdraw funds "within 30 days to avoid unnecessary complications and delays." At the end of its statement, the firm noted:

We forthrightly committed to cooperation with the Securities and Exchange Commission (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.

Since the collapse of the crypto exchange FTX, US regulators and lawmakers have intensified their scrutiny of crypto-related firms. Recently, SEC targeted Coinbase, Kraken, and Tron founder Justin Sun.

by Gile K. - Crypto Analyst, BitDegree

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• Source: https://www.bitdegree.org/crypto/news/beaxy-suspends-services-after-sec-presses-charges-against-the-firm-and-its-execs