The Securities and Exchange Commission (SEC) has found itself a new victim among cryptocurrency companies. This time the controller charged cryptocurrency platform Beaxy. The company is accused of carrying out brokerage and clearing activities without proper registration.
Beaxy founder Artak Hamazaspyan is also accused of illegally raising $8 million in an unregistered offering of securities (BXY token). The SEC alleges that Hamazaspian embezzled $900,000 by spending the money, among other things, on gambling.
The SEC also filed charges against Nicholas Murphy and Randolph Bay Abbott. They took control of Beaxy and ran the platform through Windy, an exchange platform that allows you to connect to popular wallets. This happened after Hamazaspyan left his post.
“To protect investors, there are separate registration requirements for exchanges, brokers and clearing agencies, each of which essentially acts as a check on the other. When a cryptocurrency company combines all of these features under one roof — which Beaxy has done — investors are at serious risk. The blurring of functions and the lack of registrations meant that rules designed to protect investors were not followed or even recognized by Beaxy,” the SEC said in a press release.
After the allegations were made, Beaxy decided to suspend operations due to “regulatory uncertainty”. Site representatives claim that they are cooperating with the SEC in the interests of their users.
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