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- SEC announces charges against Beaxy founder Artak Hamazaspyan.
- Crypto exchange announces immediate closure through a website post.
Cryptocurrency platform Beaxy and its management are being charged by the Securities and Exchange Commission (SEC) for not registering as a securities exchange, broker or dealer. The financial regulator has taken a unique attack against US cryptocurrency businesses.
Beaxy Digital Ltd., based in Chicago, is also accused of fraudulently obtaining $8 million through an unregistered security sale represented by the BXY token. The SEC has also charged the company’s founder, Artak Hamazaspyan, with misusing $900,000 for his own purposes.
Beaxy Closes Due to Uncertain Regulatory Environment
The complaint names Artak and two other executives, Nicholas Murphy and Randolph Bay Abbott, who manage Beaxy under Windy. The SEC alleges that Windy violated the law by allowing trading on the Beaxy platform without first registering as an exchange, clearing agency, or broker.
“Due to the uncertain regulatory environment surrounding our business,” the cryptocurrency exchange announced its immediate closure through a website post following the complaint. As a direct result, investors’ confidence in the platform’s native currency, BXY, has decreased.
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When the exchange closed all active orders and confirmed balances, Beaxy gave consumers 24 hours to withdraw their funds, according to an official statement.
Meanwhile, cryptocurrency exchange Binance has been accused by the Commodity Futures Trading Commission (CFTC) of violating US trading and derivatives regulations. On March 27, a complaint was filed alleging that the cryptocurrency exchange provided derivative trading services to customers without obtaining the necessary derivative license.