SEC Cracks Down on Beaxy Exchange for Operating Without Registration and Fraudulent Activities

The  Securities and Exchange Commission (SEC) has filed charges against Beaxy Digital Ltd., a Chicago-based cryptocurrency platform, and its executives for operating without registering as an exchange, broker, or clearing agency.

Additionally, the SEC has accused Beaxy of fraudulently raising $8 million through the sale of unregistered securities using its BXY token. Artak Hamazaspyan, Beaxy’s founder, was charged with misappropriating funds worth $900,000 for personal use, including gambling.

The lawsuit also implicates two other executives, Nicholas Murphy and Randolph Bay Abbott, due to their oversight of Windy, a company responsible for maintaining Beaxy, which allegedly transacted business through the Beaxy platform without registering as an exchange, clearing agency, or broker.

The SEC’s action against Beaxy is part of its ongoing crackdown on cryptocurrency firms operating in the United States. Beaxy has announced the immediate cessation of operations due to the uncertain regulatory environment surrounding its business, which has resulted in the loss of utility for its native token, BXY, causing distress to investors.

In its official statement, Beaxy assured customers of the exchange that they could withdraw their funds within 24 hours following the closure of all open orders and balances being verified.

The accused individuals have not admitted or denied the allegations leveled against them by the agency. According to SEC chief Gary Gensler, the case serves as a reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around.