The Securities and Exchange Commission (SEC) is back at it again with another lawsuit against another cryptocurrency exchange. The SEC has been ramping up its scrutiny of the cryptocurrency realm. The commission filed a lawsuit against Kraken for its staking program in February. It looks like regulators one after the other are trying to bring down the cryptocurrency industry.
According to the latest details from a press release, the SEC has sued cryptocurrency trading firm Beaxy and its executives for failing to register as a national securities exchange, clearing agency, and broker.
SEC also charged Beaxy’s founder for raising $8 million
The SEC also charged Artak Hamazaspyan and Beaxy Digital for raising $8 million in an unregistered BXY offering. The lawsuit also alleges that Hamazaspyan embezzled a minimum of $900,000 for gambling and other personal use.
According to the SEC, Windy assumed control of the platform in 2019 subsequent to the founder’s alleged embezzlement of funds. The platform’s executives, Nicholas Murphy and Randolph Bay Abbott, reportedly continued to operate Beaxy as a venue for trading cryptocurrency assets that were marketed and sold as securities.
SEC Chair Gary Gensler stated in the press release: “We allege that Beaxy and its affiliates performed the functions of an exchange, broker, clearing agency, and dealer without registering with the Commission and complying with clear, time-tested rules governing those activities.”
Beaxy has also agreed to cease operations following the lawsuit and shut down the platform. The exchange was also asked to transfer all the customer funds to the respective owners and destroy any BXY in the possession of Windy.