The United States Securities and Exchange Commission (SEC) has been taking a stricter stance on regulating the cryptocurrency industry. In recent years, the SEC has been increasing its oversight of the industry, asserting that many tokens and crypto exchanges should be classified as securities and should be subject to securities laws. This has recently resulted in the SEC bringing charges against Beaxy, a crypto platform, for reportedly failing to register as an exchange, broker, or clearing agency.

US SEC Continues to Increase Oversight of Crypto Exchanges

Beaxy, a cryptocurrency platform, along with its executives, has been brought to task by the Securities and Exchange Commission for purportedly not registering as an exchange, broker, or clearing agency. This is the most recent move in a series of cryptocurrency-related actions taken by the U.S. securities regulator.

The SEC also charged Artak Hamazaspyan, the founder of Beaxy, and Beaxy Digital Ltd, a company he controlled, with raising $8 million through an unregistered offering of the Beaxy token. Furthermore, the SEC alleged Hamazaspyan employed $900,000 of the raised funds for personal use, such as gambling.

Additionally, Nicholas Murphy and Randolph Bay Abbott, who are executives associated with Windy, a firm that managed Beaxy, were charged by the SEC. It is alleged Windy violated securities laws through the Beaxy Platform by not registering as an exchange, clearing agency, or broker.

Beaxy Closes Down Its Operations

The SEC also claims Windy entered into an agreement with Brian Peterson and his companies, Braverock Entities, in 2019 to offer “market making services for BXY,” and later one of the companies entered into a similar agreement for another crypto asset security. Consequently, Peterson and Braverock were identified as unregistered securities dealers by the SEC.

In response, Windy, Murphy, Abbott, and Peterson agreed to cease all activities as an unregistered exchange, clearing agency, broker, and dealer. They also agreed to close the Beaxy platform and destroy all BXY in Windy’s possession.

Gurbir Grewal, director of the SEC’s Division of Enforcement, commented:

“To defend investors, there are separate registration requirements for exchanges, brokers, and clearing agencies, with each essentially serving as a check on the other. When a crypto intermediary combines all of these functions under one roof—as we allege that Beaxy did—investors are at serious risk.”

The four individuals and the Braverock Entities accepted the terms of the agreement without admitting or denying the SEC’s allegations.

The SEC is currently pursuing legal action against Hamazaspyan for securities fraud and against both Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.

According to the statement, users of the exchange can withdraw their assets after canceling all user orders and verifying their balances within 24 hours. It is recommended that users withdraw their assets within 30 days.