The Beaxy crypto exchange and its executives have been charged by the U.S. Securities and Exchange Commission (SEC) for operating an unregistered exchange, broker, and clearing agency. Furthermore, charges were added against the company’s founder, Artak Hamazaspyan, and his firm for vending an unregulated security, the BXY token, and for embezzling a minimum of $900,000.
As per the SEC’s accusation, since October 2019, Nicholas Murphy and Randolph Bay Abbott, through the entity they managed, Windy Inc., maintained and offered the Beaxy Platform as an internet-based trading platform that made buying and selling of crypto assets feasible, which were offered and marketed as securities. The allegation claims that Windy, through the Beaxy Platform, violated the Securities Exchange Act of 1934 because it combined the orders for securities of various buyers and sellers employing established, non-discretionary procedures that allowed for such orders to interact, and the buyers and sellers entering such orders concurred to the terms of a trade, and therefore should have been registered as an exchange.
Moreover, it is asserted that Windy served as an intermediary in executing payments and deliveries upon matching buy and sell orders and guarded custody of customer assets, and hence should have been registered as a clearing agency. Lastly, it is claimed that Windy was consistently involved in the business of conducting transactions for the account of others in crypto assets that were marketed and sold as securities, and thus should have been registered as a broker.
In conclusion, the SEC has charged the Beaxy crypto exchange and its executives for operating an unregistered exchange, broker, and clearing agency, and also accused the company’s founder and his firm of vending an unregulated security and misappropriating a significant amount of funds.
