The exchange is said to have exposed its users to a very significant risk by combining various aspects of their trades that should have been recorded and operated separately.
The United States Securities and Exchange Commission (SEC) has loaded Beaxy cryptocurrency trading platform to operate in the US as an unregistered platform. According to the regulator, Beaxy and his associates violated the Securities Act.
The charges levied against Beaxy were also extended to its executive, Artak Hamazaspyan, raising a total of $8 million in an unregistered offering of the BXY token. The SEC said Artak misappropriated the funds, including using about $900,000 in gambling.
“We allege that Beaxy and its affiliates performed the functions of exchange, broker, clearinghouse, and dealer without registering with the Commission and without complying with clear and proven rules governing those activities,” said SEC Chairman Gary Gensler. “Our securities laws have for decades served to protect investors, make capital formation easier and cheaper, and improve our markets. This case serves as another reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around.”
SEC Chairman Gary Gensler has always maintained that there are securities laws that apply specifically to crypto entities that must be followed. The commission has come under fire multiple times this year following its series of enforcement actions, the latest being the Wells Notice issued to Coinbase Global Inc (NASDAQ: COIN).
Whether the criticism is due or not, Gensler is a strong advocate of investor protection and he is doing just that with Beaxy. According to the charges, the SEC claimed a separate platform, Windy Inc, and its executives, Nicholas Murphy and Randolph Bay Abbott, also joined Beaxy in violation of the Securities Exchange Act of 1934.
Windy was accused of facilitating the buying and selling of crypto assets that were being offered and sold as securities.
Beaxy puts investors at grave risk, says SEC official
In the complaint filed against the company, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said that the exchange exposed its users to very significant risk by combining various aspects of its operations that should have been registered and operated by separate.
“To protect investors, there are separate registration requirements for exchanges, brokers, and clearing agencies, each essentially acting as a check on the other,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “When a crypto broker combines all of these functions under one roof, as we allege Beaxy did, investors are at serious risk. The confusion of roles and the lack of records meant that regulations designed to protect investors were not followed or even recognized by Beaxy.
While the SEC said it is litigating its charges against Hamazaspyan for securities fraud and against Hamazaspyan and Beaxy Digital for BXY’s unregistered offering, it said the other defendants, including Windy, Arbot and Randolph, have agreed to settlements that will prevent them from continuing. . violating values.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about the real-life applications of blockchain technology and innovations to drive mainstream acceptance and global integration of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based sites and media. Benjamin Godfrey is a lover of sports and agriculture.
